If you are contributing to a 401(k) plan, you probably enjoy seeing those savings increase each year. When you change jobs, you may think of the money as a way to pay moving expenses and other costs connected to starting a new position. Or you may think of the account as a way to save for a house or another large purchase, or to borrow money for your child’s education. But wait – your 401(k) is one of the best ways to save for retirement. Only consider using it for something else if you are hit with serious hardship. Not only are their rule about withdrawing 401(k) money prematurely, but it is likely to become a critical piece of your retirement income pie since most people do not have another retirement option from their employer. For these reasons, your 401(k) is more important than you think.
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