eli5 Why are 401(K)’s so restrictive

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So i know about the 4 or so rules for a hardship withdrawal from a 401(K) and the loans you can take out as well but why are these so restrictive on how you take out the money YOU put away in there? I mean i get its a retirement account but come on man. Like the great words from the old insurance commercial, its my money i need it now.

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Anonymous 0 Comments

You gave the answer. It’s intended to save for retirement, and you are given tax advantages to do so. This is why they are restricted, and voluntary. 401(k) were the answers to pension plans that have been phased out by Corporate America and even a lot of state and local governments. Pension plans you would have no access at all to until you retired.

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