Why do people have to pay back money they take out from their retirement, it’s their money right?
In: Other
You are, I believe, referring to tax-advantaged retirement savings (e.g. 401K). In this case the income that was placed in the retirement fund was deposited in the fund before income tax was paid on that income. The system was designed to encourage people to save money so that they wouldn’t be homeless and eating cat food when they retired (because, for instance, companies were essentially stealing pension money from pension funds). When you withdraw from that fund pre-retirement you are defeating the purpose for which the tax advantage was given to that money.
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