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      Why you should avoid taking money from your 401k

      If you have a 401k account chances are it's done well the past five years.

      If your balance is tempting you to borrow from it you should use caution.

      Think twice before using money from your 40lk retirement plan.

      While taking a loan out against your own money isn't penalized you will have to pay it back with interest. So, you will be missing out on getting a higher return.

      "The way the stock market has been the last year and half or so your interest return has been up in the high teens low twenty's. Your loan interest I'm not sure, each plan is different, but if you did do it your loan interest is probably four or five percent," said Ron Lauren, CEO Sir Federal Credit Union.

      Withdrawing a lump sum before the age of fifty-nine and a half will cost you more.

      You will have to pay an upfront penalty as well as income tax penalty.

      "An early withdrawal penalty, which is ten percent of whatever you take out. So, if you take out $10,000 it will be a thousand dollars that you will be losing on that. That you just lost it," Lauren said.

      Lauren also says using a loan or taking out cash won't help in emergencies as you will have to wait at least thirty days for processing.

      When it comes to funding your vacation or household repairs it all boils down to choice. Whether or not to save money or spend money on things you want versus what you need.

      Richard Tegge, president of Wealth Strategy Group, says more and more Americans are borrowing money to pay for things they should be saving for.

      He says if you are looking to dip into that money more frequently invest in a saving's account, mutual funds, or CDs which have a shorter time limit.

      "Do it with a different bank other than their regular bank. Have it payroll deducted into that other bank account. Simply because if it's a little bit harder to get to a little bit farther out of reach the temptation of going there is less," said Richard Tegge, president of Wealth Strategy Group.