Business & Corporate Law


Finding an attorney is one thing. Paying for their expertise is another, and many individuals find they’ve got to really stretch to cover the tab. A retirement fund is tempting source of cash. But it’s one that pros repeatedly caution against using.

“Borrow the money instead. Using retirement money is the worst and you never get it back. People think they will, but they never do,” says Hounsell.

If you cash out of a retirement fund like a 401(k) or IRA, you’ll owe a 10 percent early withdrawal penalty if you’re younger than 59 ½, plus income taxes. Then there’s the opportunity cost when you remove money that is compounding on a tax-deferred or tax-free basis.

While it’s never good to run up debt, this may be one occasion that it’s unavoidable, says Vasileff.

“Borrow from friends. Borrow from family. I had a client who sold her engagement rings,” she says. “But if you don’t have assets or other options, you’ll need to incur debt. With the 401(k) penalty and tax hit, it’s better to use a credit card.”

REF: Leslie Haggin Geary,

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