Being Impatient With Your Money

You are looking at your quarterly statements and see over the past few years your 401(k)/403(b) is growing BIGGER AND BIGGER. You may start looking at what you can do NOW with that money. Vacation to Europe, new car, or your child's education. "Hey I have years before I retire".

But wait, what is the cost of you being Impatient!! You are not 59 1/2 years old, so you have to pay 10% in penalty charges and ordinary income tax. In the case of 403(b)/Roth 403(b) annuities you have to pay surrender charges. You can use  the withdrawal as a loan, but have to pay it back within a certain period of time (usually 5 yrs) plus interest.

That's money you have taken out that is no longer generating interest and compounding interest (interest on top of interest) for you. Instead of maybe $300,000 at the full retirement age of 67(if you are born after 1959), you may have $200,000. A big difference when people are living more into their 80's and 90's (at least 20 years in retirement).

However, there are certain instances in which you can get access to your money with minimum penalty, including hardship for unemployment and eviction from your house, if there is no other resources.

Read more  Rules for Early Withdrawal from a Retirement Fund

What are your thoughts on early withdrawal of your retirement fund? Are you impatient when it comes to your retirement fund?

Rhonda W.