There is a high likelihood that your job comes with certain employee benefits and one of those benefits could be that there is the option to put money into a retirement plan where there might even be a match coming from the employer.


This retirement plan could be a 401(k) or maybe a 403(b) and the only goal of this account is to accumulate money for retirement.

The general rules are that if you want to access this money before age 59 ½ you will incur a 10% penalty and there will most likely be tax consequences as well.

Therefore it is wise not to touch the money inside of your retirement account and leave it to accumulate and then use it for income once you have stopped working and you are age 59 ½ or older.

It is true that there may be circumstances where you can access the money without the penalty but instead of having to potentially invade your retirement account early why not build other accounts at the same time.

First of all let’s make sure that we have enough liquid money to support our lifestyle in case we lose a job or in case some unforeseen circumstances occur where we need extra money.

Having at least 6 months of liquid savings in place will help that you do not touch your 401(k).

Let’s also create accounts that are designated for other objectives such as buying a first home, sending kids through college or simply having another type of retirement account that can be more flexible and more efficient during accumulation and distribution years.


Some other accounts that are worth looking into are:



Brokerage Accounts


Cash value life insurance

College savings plans



Written by CreativeNurse Team

2016-21526  Exp. 4/18