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Stock impact report

Feel Compelled to Tap Your Retirement Savings? Do These Things First [Yahoo! Finance]

Discover Financial Services (DFS) 
Last discover financial services earnings: 4/22 05:35 pm Check Earnings Report
US:NYSE Investor Relations: investorrelations.discover.com
Company Research Source: Yahoo! Finance
But there may come a point when you're tempted to tap your individual retirement account (IRA) or 401(k) ahead of retirement. That scenario might arise when you have a home repair to cover. Or maybe your car gives out on you and you unexpectedly need to replace it. A December 2023 survey by Betterment at Work found that 30% of workers tapped their retirement accounts over the previous 12 months to pay for short-term expenses. But going that route could have serious consequences. Read more: unlock best-in-class perks with one of these brokerage accounts The problem with tapping your retirement savings when you're not retired The IRS offers some pretty sweet tax breaks for funding a traditional IRA or 401(k) plan. Not only does your money get to go in on a pre-tax basis, but you're not taxed on investment gains year after year. Rather, those gains are tax-deferred until you take withdrawals. But in exchange, the IRS wants the money in your IRA or 401(k) reserved for retirement Show less Read more
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