Why do people have to pay back money they take out from their retirement, it’s their money right?
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I assume you’re talking about 401 program. You’re not “paying back money”, but merely paying taxes that were owed at your time of deposit to the 401k. It’s designed that it’s removed when you retire and are no longer at your peak earning power. Therefore, whereas you would have paid a higher percentage of taxes, now you’re in a lower tax bracket. Of course if you remove money prior to your retirement age, there will be a penalty. First normally a 10% early withdrawal penalty in addition to paying ordinary income tax on that money. So save money for your retirement and build on those savings, then withdraw at lower tax rates.
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