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Benefits Of The Eatk 401k Withdrawal Penalty

The early 401k withdrawal penalty is seen as a very bad thing. It does stink not to be able to take out your money early. But it can really help people keep their money in their account. In fact it can help in these following ways.

1. Stops Foolish Spending

A lot of people spend a lot of money foolishly. All of mankind seems to have something in their genes that just makes us want to get the latest and greatest items. The fact that most people live paycheck to paycheck without putting away any money into a savings account is the major reason why 401k plans exist at all.

There are always new gadgets coming along like the iphone which makes us all want to pull strings to get a hold of them, this can make us justify getting out a early 401k withdrawal by sayings something like; I’ll pay it back later. Even thought that will never happen, and it a 401k might not even be possible if you are already contributing the 401k maximum contribution.

Having that little penalty causes us to stop and think again.

2. Helps People Look For Other Alternatives

People have to look for new ways of getting the things that they want if they cannot use their savings as easily. No one wants to be forced to think outside of their comfort zone, but it can have a lot of advantages.

For example, if you want more money you might start a business or invest into something else. Each helps to boost the economy and making life a little bit better for the future generations as a side effect.

3. Helps People Realize How Important Retirement is

Often people do not think about retirement because it is so far into the future. People may think about what they want to eat for their next meal, but something so far off into the future as retirement is often forgotten, especially for the young.

These plans do what they where created to do and that is to help people save money for retirement and to be aware of how impotant it is. The early withdrawal penalty can help people to think about their future a little before they pull money out prematurely.

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