Pros and cons of liquidating 401k

While being mortgage-free is an enviable position to be in, having a shortage of retirement savings is a decidedly unenviable position in which to find yourself.

Gary Foreman is a former financial planner who currently edits The Dollar Stretcher website and newsletters.

But before making the decision, consider whether the opportunity cost is worth it.

Tied to your company: If you quit or lose your job, you typically have to repay your 401(k) loan in full soon thereafter, regardless of the original loan terms.

While I don’t adhere to such a hardline view myself, one thing is certain…

Unless a post is clearly marked "Sponsored", however, products mentioned in editorial articles and reviews are based on the author's subjective assessment of their value to readers, not compensation. I have enough in savings to make up the difference. That being said, you can withdraw Roth IRA contributions at any time, without taxes or penalty.

But beware the potential pitfalls: Your plan may allow you to withdrawal from your retirement savings for a first-time home purchase or an emergency (such as medical or funeral expenses).

Withdrawals have stricter rules and bigger consequences.

Your 401(k) is a retirement account, and it serves you best in that capacity.

But you can save a lot in interest by using a 401(k) loan to pay off credit card debt, Harvard Business School professor and behavioral economist John Beshears says.

Search for pros and cons of liquidating 401k:

pros and cons of liquidating 401k-48pros and cons of liquidating 401k-17pros and cons of liquidating 401k-32pros and cons of liquidating 401k-66

Leave a Reply

Your email address will not be published. Required fields are marked *

One thought on “pros and cons of liquidating 401k”