14% of Americans with retirement savings, both working and unemployed, have already tapped into those funds investinyou (In partnership with acorns.)
, including education expenses, buying your first home, covering massive medical debts or being ordered by a court to provide alimony or child support.Yet while lawmakers made it easier to take a withdrawal from your retirement savings, many experts say that it should not be the first step you take if you're struggling financially. First make sure that you have explored and exhausted the other options available to you, says Kevin Mahoney, a CFP and founder of Washington D.C.
If you tap into your 401 or other retirement accounts, make sure you're using the money to pay off outstanding debts or cover an income gap during this difficult time, says Michael Kelley, an Ohio-based CFP and founder of Kelley Financial Planning. Don't take it out to have an extra financial cushion or to make a big purchase, like a car.
"It's OK if the plan changes more than once in the months ahead. And it's OK if you're not exactly sure how much you'll be able to replace each month or when the account will return to its current balance," Mahoney says. "Rather, this exercise is valuable because it reminds you that this is money you still intend to use later in life."
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