Marc Walstedter of Danbury, Connecticut found out last month that he had been let go from his job. The 47-year-old was a sales director at Auction Simplified, a firm that provides software programs for auto dealers. The company came under financial pressure after auto dealerships shuttered due to the virus outbreak.“Unemployment isn’t going to cover my mortgage payment,” Walstedter says. “My wife and I have already talked about dipping into our 401s so that we can get by with our two kids.
“Once you pull funds out of your retirement accounts, it could take a while to replenish and it could be quite detrimental to long term savings goals,” says Tim Bray, senior portfolio manager at GuideStone Capital Management. “People should cut expenses and take advantage of the emergency checks coming from the government’s stimulus package before withdrawing money from their 401s.
Experts say you could consider taking out a loan to tide you over if you’ve been furloughed, but are confident that you’ll be working again in the near future. A 401 withdrawal would make more sense for someone who has been laid off and doesn’t have a safety net or enough saved for basic expenses over the next three to six months, they said.
Yes but if that's all you have to fall back on and your gas tank is empty along with your cabinets, you're not real concerned with the long term effects, you need money and you need it now
If you need food and medicine ... those can't wait for the government. Paying anything other than that ... only when your curve is absolutely flat!
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