Don’t Touch It Early

Your aim, when contributing to a 401(k), is to compound and generate gains over time. But if you touch your money early and make premature withdrawals, you will lose most of your progress, and try as you might, you might never be able to catch up again.

But that’s not the only reason your retirement savings will suffer. If you withdraw money before you turn 59 ½, you will owe a 10% withdrawal penalty on the sum you took out in addition to having to pay ordinary income taxes. There are only a few exceptions to this rule!

Taxpayers should think twice before touching their 401(k) early, as in some cases they could lose 50% of the money they’ve already accumulated. Are you ready to slash your retirement savings in half? No, we didn’t think so.