As a general rule, savers should not touch the money that they put away in 401k or IRA accounts for retirement. Not only is there a penalty for withdrawing funds early, but anything taken out of those accounts will mean less money available when you need it to finance your retirement. But sometimes people run out of options, leaving retirement accounts as a last resort for much-needed cash.
If you find yourself in this position, it’s okay. But know that you have a better option available to you than just taking money out of your accounts. It’s called a 401k Loan, and it work exactly the way it sounds. You are borrowing money from your retirement account with the intention of paying it back as soon as money is available. This way you don’t draw down on the amount of money in your account for retirement. Learn more about these loans here.