Why can’t I access money that I have earn’t before the age 55. For instance I’m 30 and I have a pension from an old job that is not my main pension. It has 1k in it, I could do with the money now but everywhere I look it says you can’t access it till your 55? It’s my money I don’t understand how they can keep it from me unless I pay some ridiculous early withdrawal tax of 50%?
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I’m assuming you mean retirement account, not pension.
Most retirement accounts are given preferential tax treatments because there are perceived societal advantages in making people save money so that they’re not destitute when they’re too old to work. So the government says, “cool, we’ll tax you less provided you save money for retirement now”.
If you let people withdraw that money like a normal savings account, some will. Those people will not save for retirement, so that advantage is gone. The penalties are to keep people from saying, “hey, spending $20k on a vacation now sounds a lot better than saving for some time in the future!”
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