Regardless of how many petitions are signed, the prospects of a fourth stimulus check appear to be small. Is it alright to use your retirement savings with no stimulus check on the horizon?
Should You Use Your Retirement Savings If You Have No Incoming Stimulus Checks?
It is if you have no other options. Stimulus Checks have no political backing in the GOP. Use your retirement savings if the following are true:-
- You have no other way out.
Using money from your retirement account can have severe consequences that can impact you later. Before withdrawing money from your savings, consider these options instead:
Getting an APR credit card can help, but be sure to balance the credit before the rate expires.
Hustling on the side.
Holding a yard sale for things you no longer need or use.
Adjust your budget to the money available.
You should consider short-term solutions that will not impact your distant future. However, if you have no means available, then you have no choice but to use your retirement savings.
- The expenditure is very important.
Use your retirement savings for crucial expenses like forclosure, medical care, repossession of your vehicle, or to keep other severe situations at bay. Do not waste your savings on things that will have no consequence in the long run.
- You understand the consequences of dipping into your retirement savings.
Withdrawing early from your retirement savings before you turn 59 will result in a 10% deduction. You will lose 1/10th of your savings right there. If you cannot return the money, you will also lose out on returns. You can lower your losses by checking if you are eligible for hardship penalties. It will let you dip into your savings without penalties.
Your employer could allow you to borrow money from your 401(k). But if you cannot return the money on time, it will be considered a loan. You will lose out on interest during the compensation period. If you understand the consequences and have zero options available to you then, by all means, go ahead.