Can a Diva get a bailout for her 401k?

Hello Divas!

Wouldn’t YOU just love a financial bailout? I am considering changing my name to the Bank of 401k Diva so i can get in on the $800 billion bailout!

Now ladies, all jokes aside, I know these are difficult times. As a result, more Americans are tapping into their 401k money to relieve the financial pressure. While you may find this idea extremely tempting, I am here to let you know that the 401k diva considers this move anti-divalicious. Let me explain.

Most 401k plans allow you to make a withdrawal for hardship. However these early withdrawals come with something that makes the 401k diva cringe — penalties!

Not only will you:

a. pay taxes on the money you withdraw you will also…

b. get slapped with a 10% penalty! and on top of all of that…..

c. some employers charge a service fee.

This is not diva acceptable.

You work hard for that money, and you will need every drop of it, if not more, when you get ready to retire. Financial adviser Tom Orecchio told CNN that 40% of the money you withdraw will go to Uncle Sam. Diva’s, this is one Uncle who does not deserve your money!

If you are experiencing financial difficulties and must tap into your 401k as a last resort, please get some professional advice and understand how much this decision will actually cost you. Take a look at the CNN article which provides tips on 401k withdrawals.

Keep in mind, the 401k diva urges you to proceed with extreme caution when considering this anti-divalicious behavior.

Here’s to your financial fabulousness!