401(K) WITHDRAWAL ⁵

HOW IT WORKS

A retirement savings plan sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes are not paid until the money is withdrawn from the account.

PROS

• Quick Access to funds

CONS

• 10% early withdrawal penalty for those younger than 59 ½
• Puts retirement in danger
• Lost opportunity for tax-deferred growth