Pulling Money from Your 401k to Pay for Your Kids Education? Think Again
If you have ever considered doing this for your child, did you weigh all the potential consequences? Recently, I was quoted in an article on Main St. sharing how there are other options available to you versus pulling money out of your retirement funds to pay for things like your child’s college education, a down payment on a house, or a large credit card bill. One good reason why this is a bad idea: tax penalties. There is a 10% withdrawal penalty if you take money out before age 59 ½, unless those funds are used for college expenses. In addition, you miss out on additional growth in your portfolio through the power of compounding and are more than likely not going to make up for what you have taken out.
I encourage you to read this article to better understand the importance of saving for retirement and leaving the money you save in your accounts until retirement. Click Here to read the article.