You will miss out the compounded earnings you’d otherwise receive, you’ll likely get stuck with very early withdrawal charges, and you should truly need to spend tax regarding the amount withdrawn to the government.
It can be done if you absolutely must draw from your 401(k) before 59-1/2, and emergencies do crop up, there are a few ways.
Hardship withdrawals
You’re permitted to make withdrawals, as an example, for certain qualified hardships — though you’ll likely nevertheless face a 10% very early withdrawal penalty in the event that you’re under 59-1/2, plus owe ordinary taxes. Continue reading “Whenever confronted with a unexpected money crunch, it can be tempting to touch your 401(k)”