15 Reasons You’ll Go Broke in Retirement

You Borrowed from Your Retirement Savings

Many of us, in a mid-40s pinch, saw an easy way to pay down credit cards over five years by borrowing from our employer-sponsored retirement plans. After all, retirement was decades away and the money (our money) was just sitting there. Right?

But borrowing from your 401(k) is an all-too-common mistake you’ll regret in retirement. According to Transamerica, one-third of workers have taken some form of loan, early withdrawal or hardship withdrawal from a 401(k) or similar plan, with 35% of those surveyed doing so to pay off debt.

Taking a loan from your 401(k) can severely inhibit the growth of your retirement nest egg and have lasting consequences. Not only is the money you borrowed not earning interest in your account, but you’ve also stopped making new contributions as you try to pay down your debt. And, of course, no new contributions means no matching contributions from your employer. This is why every worker (and every retiree) needs an emergency fund…