More and more people are dipping into savings, formerly set aside for retirement, to help pay for present-day expenses (e.g., mortgage payments, medical bills, gasoline, etc.). That’s according to a recent article in the “Boston Globe”. However, doing so affects how much income you will have during your retirement.

Prematurely withdrawing funds from your retirement account has a number of disadvantages, according to the Globe article. The short-term impact is that you will be required to pay taxes and penalty fees on the withdrawn monies. Over the long term, you will miss the compound interest that your employee contributions, as well as matching employer contributions (if applicable), would have generated. The end result is a smaller balance for your account once you retire.

If you sponsor a NADART plan, we can help you figure out a plan for retirement. To find out more, please complete our online Product Information Request Form. Or contact a NADART representative at (800) 462-3278, ext. 7161 or by e-mail at nadart401k@nada.org.