With a slew of layoffs, rising costs and loans becoming harder to obtain, an increasing number of Americans are breaking the guidelines of retirement savings and cashing out their 401(k)s. But before breaking open the piggy bank, plan participants should consider the taxes and penalties they will have to pay, as well as the thousands of dollars in compounding interest they will lose.Mutual-fund giant Vanguard says that in 2007 alone -- before the credit crunch and housing downturn hit in full force -- hardship withdrawals rose 9%, on top of a 17% increase the previous year.
Early 401(k) Withdrawal Costs How Much?
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.