From the course: Planning for Retirement
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Early loans and withdrawals
- Retirement accounts offer several tax benefits and in exchange for those benefits, there are some rules around getting your money out prior to age 59 and a half. Why 59 and a half? Who knows, but that's the magic number that the IRS uses for most retirement account withdrawal rules. The age limit and penalties are intended to incentivize you to let your money grow and avoid taking it out too soon. That said, there are times when you might need access to the money in your retirement accounts. Maybe when you face an emergency and you've already used up your emergency fund. So let's review some of the rules around how you can access funds from various retirement accounts before you retire. For employer plans like 401ks and 403Bs, most but not all employers allow you to take a loan from your account balance and pay it back over time. Typically up to five years. Typically retirement account loans are paid back via…
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