Gentle readers, please do me a personal favor. Don't withdraw money from your employer-sponsored retirement plan account unless you have a really, really good reason to do so.

Medical bills (and I don't mean bills for elective plastic surgery)? OK.
Impending eviction or foreclosure on your home? Fine.
Post-secondary education costs? Sounds good to me.

BUT...

Remodeling your kitchen?
Going on a vacation and need some extra pocket change for that roulette wheel in Monte Carlo?
Buying Christmas gifts?

Please.

And if you're 22 years old, do me another favor. Don't stick all your savings into a money market fund that earns 2.5% per year.

Why not? Because the rate of inflation is around 3% per year. Do the math. If you're only earning 2.5% a year in a money market fund, and inflation is 3% a year...I got news for you: you'll NEVER be able to retire.

Instead, invest your money in a good index fund and don't even think about it for the next 35 years.

/end public service announcement

Labels: money, work