Picture this: you’ve left your office for the last time. You’ve spent the better part of your career preparing for this exact moment and have finally reached retirement bliss. Now imagine those magnificent golden years being ripped away from you—and in their place, many more years spent in the workforce. This nightmare is a reality for many American workers, due in part to poor planning, inadequate preparation, and insufficient financial education. And one of the most commonly misunderstood retirement basics? What really happens when you take an early withdrawal from your 401(k) plan.
Imagine it’s Wednesday afternoon and you’re on the downside of your work week. You’re looking forward to working in the yard, taking in a ballgame, or perhaps hitting the greens for a round of golf this coming weekend. Off in the Atlantic, a tropical storm is brewing, but forecasters predict it will spin harmlessly off the coast, trailing back into the mid-Atlantic. By Friday, the forecast changes and the storm is bearing down on you. A disaster looks imminent, so what do you do?