FINANCIAL FOCUS
At some point, you may have more money in your 401(k) than in any other investment. And even though your 401(k) is intended for your retirement, you may one day think you have to tap into your account early — but should you? And if you do, how should you go about it?
If it’s possible to avoid taking money from your 401(k) before you retire, you probably should do so. You could spend 25 or more years in retirement, and you’ll need to pay for those years, so you may want to look for alternatives to your 401(k). If you’ve built an emergency fund containing several months’ worth of living expenses in cash or cash equivalents, you could use some of this money. If you have a Health Savings Account (HSA), you could use it to pay for qualified medical expenses. Or you could sell some of your taxable investments, rather than going into your tax-deferred 401(k).
