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Episode 3255:
Cynthia Meyer explains why tapping into your 401(k) or 403(b) through a hardship withdrawal should be a last resort, outlining the steep tax penalties, loss of long-term growth, and strict IRS rules that apply. She offers a series of practical questions to weigh alternatives, like selling assets, using a Roth IRA, or taking a retirement plan loan, before sacrificing retirement savings. The advice encourages a disciplined, future-focused approach to financial emergencies while still addressing urgent needs responsibly.
Read along with the original article(s) here: https://www.financialfinesse.com/2017/03/27/should-you-take-a-hardship-withdrawal/
Quotes to ponder:
"Just because you could withdraw funds doesn’t mean that you should do it."
"A hardship withdrawal is meant for a true emergency."
"Think of it as a tax I’ve paid to my future self."
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