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21 Alternatives To Try Before Withdrawing From Your Retirement Fund Early

GOBankingRates Logo By John Csiszar of GOBankingRates | Slide 1 of 26: When a serious financial emergency hits, like the COVID-19 crisis, it’s only natural to get a bit anxious. To help ease the financial pain, it’s easy to look toward the largest pot of available money, which for many people is their 401(k) plan. Recent legislation due to the COVID-19 pandemic allows account holders to withdraw up to $100,000 from their 401(k) plans without paying penalties, just taxes. However, dipping into your retirement account under these circumstances is rarely the right call. For starters, making any financial decision based on emotion — especially if that emotion is panic — can have devastating long-term consequences. Secondly, accessing your 401(k) prematurely can cause financial damage, from the taxes you’ll owe to the shortfall you’ll have in your retirement savings. If you find yourself in a serious financial bind, consider some of these options before you decide to raid your 401(k) plan early. Last updated: May 18, 2020

When a serious financial emergency hits, like the COVID-19 crisis, it’s only natural to get a bit anxious. To help ease the financial pain, it’s easy to look toward the largest pot of available money, which for many people is their 401(k) plan.

Recent legislation due to the COVID-19 pandemic allows account holders to withdraw up to $100,000 from their 401(k) plans without paying penalties, just taxes. However, dipping into your retirement account under these circumstances is rarely the right call.

For starters, making any financial decision based on emotion — especially if that emotion is panic — can have devastating long-term consequences.

Secondly, accessing your 401(k) prematurely can cause financial damage, from the taxes you’ll owe to the shortfall you’ll have in your retirement savings. If you find yourself in a serious financial bind, consider some of these options before you decide to raid your 401(k) plan early.

Click through the slideshow to see the options.

Last updated: May 18, 2020
© SeventyFour / Getty Images/iStockphoto

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