by Garrett Johnson, Heritage Institutional
Recently our team ran across this insightful article by Thomas Scarlett on the Seven Deadliest 401(k) Sins You Can Commit. I like what he says about not chasing returns and cutting back on living expenses to increase your contribution level. Remember a lot of advice can be boiled down to simply taking the time to stay on top of your finances such as Scarlett’s “sin” of not keeping your 401(k) with a former employer. Awareness and action goes a long way. Scarlett also tells us:
Withdrawing Funds Before Retirement
It can be tempting to look at the pile of money you’ve accumulated already and dream about tapping into it before you reach retirement.
Recent tough economic times have certainly increased that temptation for many, especially those who have seen the value of their homes fall sharply.
But raiding your retirement fund should be an absolute last resort. Even if you can demonstrate a hardship, the Internal Revenue Service will force you to pay a 10% penalty on the amount withdrawn. If you take out $20,000, $2,000 of your savings is gone for good.
If you are looking for even more resources that simplify retirement, for young and old readers alike, I highly recommend the book Mock Retirement by Peter Dunn. I recently read this book and although I am several years away from retirement (hopefully), it allowed me to think more strategically about my own retirement and gave me insight on what I should be doing now to get to where I want to be when that day comes. Mr. Dunn takes a deeper look into the same aspects of retirement mentioned by Mr. Scarlett; topics such as how much money should I be contributing?, healthcare, & social security, and most importantly, your lifestyle.