Has anyone pulled from their 401k to pay for the wedding?

I am pretty sure you have to pay a penalty if you take money out of your 401k early. And its really not a good habit to get in. If these people don't have the money, they shouldn't upgrade things on credit or this way.

I picked up extra freelance and part-time work. We didn't want to pull too much from savings and we didn't want to put anything on credit that we couldn't afford to pay off immediately.

Do not do this. Have a wedding your can afford to pay for out of pocket.

I personally would not take out from a 401k. 1) its supposed to be a savings for retirement or an extreme emergency and 2) you are going to pay more in taxes for the money that you take out than you would on a credit card. Unless you take it out as a loan but its the same thing as paying on a credit card expens

@Christy - I was able to start my 401k while I interned for a company (I was there longer than 6 months) and my job allows me to have a 401k post-undergrad, but I'm also salaried in the finance field. ETA - but I also pretend the money doesn't exist. It's awesome to pull up from time to time and see it grow!

I highly recommend not withdrawing from your 401k for your wedding. Not only do you get penalized, it becomes part of your taxable income so you may end up owing more to taxes than normally and wouldn't make this worth it.

Not worth it for a party. At all. Horrible idea. You will be assessed a huge penalty plus have to pay taxes on top of it .

Don't do it. Whether or not you have a penalty, this is money you've put away for a specific purpose, and it's hard to replace it.

Do what you can afford. Don't take a loan for a party from any source.

@Kate - I was just about to mention the compounding interest, but you've got it covered!

I wanted to borrow against my 401k for repairs on my house a few years ago and my manager talked me out of it. It's not a good idea.

My FH has pulled money out of his 401K a few years ago (not anything wedding related) and then he had a set amount come out of each paycheck to pay it back.

@christy yea we all started our 401ks w/o really understanding what is was at the time. I just remembered my mom saying if its an option at any job then elect and contribute the max you can afford, because for the bug things like putting a deposit down on a house or or other major life events. Its there. @ Nas Its basically a savings account you can invest and some employers match what you contribute. If you withdraw its a 10% tax penalty from the amount you choose to withdraw because then it counts as income. My rate of return is still pretty low.

@ Nas I dont think the education curriculum spent enough time explaining things like this. I didnt fully get what it was until recently.

@kristen328 what did your manager say against it?

401k's aren't really designed for that. They're more for retirement to pull out after you've turned 59 and a half. The Roth IRA's are better designed for house deposits or other major life events. Trust us when we say don't withdraw!

No, I would never do that unless it was an extreme emergency. I picked up a second job for the weekends, gives me a good chunk extra money a month for the extra stuff.

This is definitely not advisable. You'd be losing so much money in penalties (if its not a loan), and also the amount that you should be earning in interest on the money you take out.

There is no need to "upgrade" things for a party either on credit or via a 401K loan. I picked up an extra side job babysitting, we cut cable, budget, etc. There are far better ways to come up with more money.

Please do not do this! Yes, you can technically take out a loan and pay yourself back. But, I strongly suggest against this! A 401k is NOT your savings account, it is for your retirement!

As previous posters have said find other ways to fund items that you want to upgrade or consider if they are that important. But IMO do not take out from your 401k. In order for it to work best you want to target a strategy for your intended retirement date and investment experts can help maximize your return. As Kate said the compounding interest is important. Generally, you never want to have to withdraw, that's why it comes with a penalty.

I HIGHLY advise AGAINST this. I had to pull from my 401k from a previous job because my ex lost his job and we were on the verge of losing a lot more. I had to pay a penalty come tax return. You don't want to go broke for a wedding. If you can't afford it, cut down on some things.

Pay for the wedding you can afford.

I would never suggest pulling from a 401k for a wedding unless you are over age 59 1/2 because there are so many taxes and penalties. Perhaps they are talking about a Roth IRA? For those, I believe you can pull out a portion of your money without penalty, however, people considering taking from a 401k probably wouldn't have a Roth IRA.

So in short, I wouldn't ever consider it, but then again I wouldn't put my wedding on credit either. Have the wedding you can afford (while still hosting your guests appropriately). Whether you are engaged longer or have a smaller wedding it will be worth it over crippling yourself financially. You don't want financial stress going into your happily ever after.