This [early withdrawal penalty] is 10% for people using this fund who are age 59 ½
MIAMI (PRWEB) November 17, 2018
A lot of people have been diligently putting money aside in their 401(k) for retirement and National Debt Relief explains why it is a bad idea to use that fund to pay for debt obligations. The article titled “ Should I Use My 401K to Pay Off Debt?” released November 14, 2018, shares some of the reasons why consumers need to use their 401(k) only for their retirement expenses.
The article starts off by explaining that people who have been faithfully saving in their 401(k) could still have debt problems. Thinking that their 401(k) is much like a savings fund which they can access at any time, some people choose to take it out to pay for debt obligations. Once they do this, they are losing a lot and actually hurting their future financial stability.
The article helps consumers by first clearly defining what a 401(k) really is and its function. The fund is actually a company-sponsored retirement program. This gives companies the ability to take out pre-tax contributions of their employees for their retirement. Most companies even match a percentage of what their employees are putting into their 401(k) account.
The article reminds people that whenever they feel like dipping into their 401(k) accounts to pay off their debt obligations, they need to know about the early withdrawal penalty. This is 10% for people using this fund who are age 59 ½. Consumers also need to remember that with the cost of living guaranteed to go up and the state of Social Security continually in question, saving money for their retirement should be one of their top priorities.
The article explains that people can borrow against their 401(k) but they have to pay it back with interest. People need to understand that it took a long time to build up the money in their retirement account, and it would take many years for them to catch up again. During that time, people would be missing the interest that the money would’ve made by being invested.
To read the full article, click https://www.nationaldebtrelief.com/use-401k-to-pay-off-debt/