The temptation to dip into your retirement savings early can sometimes be alluring. No matter how alluring, you should NOT withdraw early! Here’s why?

You lose the opportunity for your money to grow tax-deferred
The time value of money is crushed when you pull out the money you have saved for retirement. You will never get that time back!
If you pull money out of your retirement plan early, it will be subject to taxes PLUS a 10% penalty.
You will have to recognize the withdrawal as income for that year which will usually bump you up a couple of tax brackets.
It is a VERY EXPENSIVE way to obtain money. You will ultimately pay around 45% taxes on the money you withdraw! If you pull out $50,000, you will actually bring home $27,500! Taxes and penalties will cost you $22,500! That is worse than a credit card!
Are you viewing this cash withdrawal as a way to avoid more debt? I have seen too many cases where money is withdrawn (very expensively) and without a change in spending behavior. Don’t put yourself in a position to end up with zero or very little in their 401(k) PLUS a pile of debt that increases every month!
FINAL REASON: It’s for RETIREMENT!

Retirement plans are designed to secure your future when you decide to retire. Withdrawing early disrupts this purpose and may hinder your ability to achieve financial independence later in life. Instead, consider alternative financial strategies to address immediate needs without compromising your retirement goals..