52% of Americans have raided their retirement savings early—here's why that's a mistake. (via CNBCMakeIt)
While they may have good intentions, many financial experts warn against this line of thinking. "You don't want to derail your retirement for your child's college education when they can get a loan or scholarships," certified financial planner Carrie Schwab-PomerantzIt's best to avoid taking from your retirement early if at all possible, regardless of the reason, Ryan J. Marshall, a New Jersey-based certified financial planner, tells CNBC Make It.
"One of the worst things we see is when people try to play catch up with their retirement later on," Marshall says.1. Borrowing early could result in penalties and fees Not only will taking money out early leave you with less in retirement, but you could also be hit with early withdrawal penalties.. And if you take out a significant amount of money at once, those withdrawals could push you into a higher tax bracket since you'll have to include withdrawals as income on your tax return.than those of a 401 plan. But, typically, the same 10% penalty applies to any interest accrued on your contributions if you are younger than 59½.
There isn't a compound interest fountain of youth and we can't go back in time. Once you miss out on the compounding interest effect, it's lost.
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