Retirement Income Plan - Dipping into Retirement Account Can Cost Plenty

by W.B.M.
(CO)

Many people today are evaluating their retirement income plan. With the difficult economic situation we are facing these days, more retirees and those close to retirement are considering taking money our of their 401k or IRA to help get past these tough times.

I came across a good article in the South Florida News, dated August 23, 2010 that talks about the problems one can run into when you do take money from a retirement account. It states that it can cost you plenty if you do withdraw you funds.

People think that the emergency withdrawal section of their retirement plans can save them, but taking our your "rainy day" funds can have a long lasting effect on you plans.

Be careful as there are only a certain category of things that the government will allow that money to be spent on, such as immediate foreclosure or eviction. And of course, you still have to pay taxes on any early withdrawals from retirement accounts when you file your return.