Article: When IRAs, 401(k)s, And Other Tax-Sheltered Investments Don?t Make Sense
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When IRAs, 401(k)s, And Other Tax-Sheltered Investments Don?t Make Sense
Every year about this time, people start talking about and considering things like IRA contributions. Most of the time, tax-sheltered investments make great sense. The federal and state governments have designed their tax laws to encourage such savings. However, that said, there are three situations in which it may be a poor idea to use tax-sheltered investments:
You know you?ll need the money early
In this case, it may not be a good idea to lock away money you may need before retirement because there is usually a 10 percent early-withdrawal penalty paid on money retrieved from a retirement account before age 59 1/2. But you will also need money after you retire, so the ?What if I need the money?? argument is more than a little weak. Yes, you may need the mone...
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