Why raiding your 401(k) during COVID-19 should be an 'absolute last resort.'
Jarvis shared three reasons why taking money out of your 401 is not the best financial option for most people at this time."The CARES Act now allows people to withdraw money from their 401 before they are [60 years old] without paying the 10% penalty, but you still have to pay taxes on whatever you withdraw. You’re still going to owe money on what you take out.".
"In addition to that, because the market has sold off, you would be selling on the lows. You’re not going to make any kind of upside as a result of withdrawing that money."."The most important key here is that you’re stealing from your future. If you take $10,000 out of your 401 today, you are taking out what could become about $60,000 if you let it ride out this storm and let it go for the course of 30 years.
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