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401k withdrawals
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<blockquote data-quote="UpstateNYUPSer(Ret)" data-source="post: 313739" data-attributes="member: 12570"><p>Info, I am sorry if my post wasn't very clear. I was trying to say that withdrawals are possible but only under the situations which Tooner was kind enough to list for us. Basically, you have to be in serious trouble before you even want to consider a hardship withdrawal.</p><p> </p><p>Another poster stated that you should never borrow money from your 401k. I have to disagree but with a disclaimer. Yes, borrowing money from your 401k will reduce the amount that is available to gain interest, which is called compounding and which is the basic principle by which retirement savings such as the 401k work to the investors' advantage. However, smart use of the loan process can be to your advantage. For example, I took out 8 loans over the course of 4 years (2 loans/year timed so that one loan would be paid off when it came time to pay for the next semester and the next for the following semester and so on) while my 2 kids were in college. My daughter graduated this past December and my last 401k loan was paid off this past summer so now I am ramping up my contributions to get my balance back where it should be in preparation for my last 11 years. Taking out loans and using the entire 5 years that you are allowed to pay back the loan will only serve to lessen the amount of interest that you could have earned if you had not borrowed the money</p><p> </p><p>Work with your creditors. Search for any and all alternatives other than touching your 401k. Your retirement years will thank you for not touching your 401k now.</p></blockquote><p></p>
[QUOTE="UpstateNYUPSer(Ret), post: 313739, member: 12570"] Info, I am sorry if my post wasn't very clear. I was trying to say that withdrawals are possible but only under the situations which Tooner was kind enough to list for us. Basically, you have to be in serious trouble before you even want to consider a hardship withdrawal. Another poster stated that you should never borrow money from your 401k. I have to disagree but with a disclaimer. Yes, borrowing money from your 401k will reduce the amount that is available to gain interest, which is called compounding and which is the basic principle by which retirement savings such as the 401k work to the investors' advantage. However, smart use of the loan process can be to your advantage. For example, I took out 8 loans over the course of 4 years (2 loans/year timed so that one loan would be paid off when it came time to pay for the next semester and the next for the following semester and so on) while my 2 kids were in college. My daughter graduated this past December and my last 401k loan was paid off this past summer so now I am ramping up my contributions to get my balance back where it should be in preparation for my last 11 years. Taking out loans and using the entire 5 years that you are allowed to pay back the loan will only serve to lessen the amount of interest that you could have earned if you had not borrowed the money Work with your creditors. Search for any and all alternatives other than touching your 401k. Your retirement years will thank you for not touching your 401k now. [/QUOTE]
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