Is Dipping Into 401K Early Okay?

By: Ann McIntire Email
By: Ann McIntire Email

Ever been in a pinch and wondered where some extra cash could come from quickly? A new study finds more and more people have pulled from their 401K before retirement.

Hoover Elementary School students in Council Bluffs just this week opened their own U.S. Bank branch to help children learn early on the importance of money management.

"It's a little bit harder than what you do at normal school," said Jocelyn Hendrix, a fifth-grader who is working as a teller. "I thought that this was a great learning opportunity and I think that this will help me later on in life, to get into a good college, to get a good career."

Unfortunately, not everyone is great at managing their money. A new report shows one out of four Americans is pulling money out of their 401K early to pay off bills. That's $70 billion removed from retirement accounts last year.

"Big mistake, one of the things I talk to my participants with is to start paying into their retirement," said Toni Simmons, who teaches a number of classes through Goodwill's READY program, including money management. "That's money, do not touch it."

Simmons teaches her students to track where their money is going. "Many of them are surprised how much they use every day for a whole week on a cup of coffee, that's money that could be saved."

The new study also finds only eight percent of those pulling from retirement are doing so because they lost a job. Seventy-five percent are simply lacking basic money management skills. It's something Council Bluffs Schools are tackling early and finding plenty of enthusiasm. "Yes, I'm very excited!" said Hendrix.

For more information on Goodwill's READY Program, click the link below. We also have a link posted to some easy money management ideas.

Comments are posted from viewers like you and do not always reflect the views of this station.
powered by Disqus
WOWT NBC Omaha 3501 Farnam Street Omaha, NE 68131 (402) 346-6666
Copyright © 2002-2014 - Designed by Gray Digital Media - Powered by Clickability 187177481 -
Gray Television, Inc.