In today’s tough economy, people are searching for all sorts of options to pay their bills and feed their families. One of the options that more and more people are turning to is to cash out their 401ks early, a risky endeavor, but one that can be beneficial if handled correctly. Life can get really crazy really fast, and “hanging in there” isn’t always the smartest thing to do. Sometimes you need cash immediately to help you get back on your feet again. Sometimes feeding your family takes precedence over every decision you make. That is where the benefits of cashing out 401k early come in.

With people losing their jobs and getting pay cuts everywhere you look, cashing out your 401k early is not such a bad idea at the moment. This reason is this: if you are making less money this year than you have previously, then you are going to be paying much less in taxes than you would making your normal “full” income. One of the best benefits of cashing out 401k early is that it gives you access to cash when you need it most and will cost you a lot less now to get it than it will when the economy picks up again, because your income is lower than it will be when the economy picks up again. In a nutshell, the biggest benefits of cashing out 401k early is that you will have to pay less in taxes now than you will later because your income is so low.

Oftentimes, young people decide to cash out their 401k because they only have something like $7,000 saved anyway and that $7,000 can go a long way when you have no spending money and are just trying to build up a comfortable lifestyle. It is hard to suffer for something that seems so far away, making cashing out early a very tempting option for young adults especially. Another major one of the benefits of cashing out 401k early applies mostly to those young adults or people who are starting from scratch—it gives them a chance to take better care of themselves at present, helping them to get on their feet sooner, leading them to a life-long pursuit of financial security and retirement savings. You can’t save money if you don’t have any—sometimes you just need a little boost to get you started, and as long as you establish a plan and follow that plan, there is nothing wrong with getting that cash from your 401k early.

Before you make any major decisions though, make sure you talk to professionals and to your family. There are many benefits of cashing out 401k early, and doing so can give you a huge break now, but if you don’t know what you are doing, you will pay big bucks later. Taking money out of your retirement savings is a big decision, but it isn’t always a bad one, so consider, consult and—if it seems right—cash out.