THINK LONG TERM !

I constantly remember the words of my mother (a wise woman), "The future is always closer than you think." Here is a word to the wise, a flashing red light!

A train is coming when you dip into your 401K/IRAaccount. More and more, tax resolution firms receive calls from clients who have made this tragic mistake. The effects are not momentary as many would surmise. When you rob Peter to pay Paul, Paul always comes back when you don't have the money to pay him, needing it the most.

I talk to clients every other day who have felt the pressure to dip into their "retirement funds." They use the money to pay for vocational or educational needs. Some are using the money for basic living expenses now, not realizing they are about to be double-taxed and charged a 10% early withdrawal penalty. This is mandatory if you are younger than 59-1/2. That money will then not be available in the future when you are ready to retire. Most of the time, brokerage firms do not withhold the correct amount of taxes for you to avoid this double taxation.

In most cases, you would be much better off borrowing money from private lenders, friends, specialty loans for vocational retraining, relatives, or do without until you find some other way.