Minnesota Gov. Tim Walz took $135K from his 401(k) for his kid's education as more Americans are also feeling the need to withdraw early — how can this move impact your retirement?

Retirement realities

If your goals are to use your retirement funds before you retire, remember that you might be slapped with an early withdrawal fee. Typically, if you try to access retirement funds before age 59 ½, you’ll face a 10% penalty.

That said, the IRS allows you to withdraw without a fee for several specific purposes.

The type of legitimate reasons that qualify for this exemption might include health care, adoption, or in Walz’s case, education.

Even if you can do it without being dinged, there’s still a lot of risk involved in early retirement withdrawals. That’s because the vast majority of Americans don’t have even close to what they need to retire.

It’s worth getting a financial expert’s opinion to give you clarity and peace of mind when it comes to your retirement dreams.

Experts like those that can be found through Zoe Financial offer the guidance needed to establish what your best financial path is.

After sharing some information about yourself and your finances, Zoe Financial matches you with two to three FINRA/SEC registered financial advisers best suited to help you consider your financial goals and develop a plan to achieve them.

You can view the advisors’ profiles, read past client reviews, and schedule a free initial consultation with no obligation to hire.

Their elite network of advisors can tailor personalized financial strategies for you, whatever your money goals are.

Discover how a simple decision today could lead to an extra $1.3 million in retirement

Learn how you can set yourself up for a more prosperous future by exploring why so many people who work with financial advisors retire with more wealth.

Discover the full story and see how you could be on the path to an extra $1.3 million in retirement.

Read More

Catch up on retirement savings

So, early withdrawals might seem wise today, but they can have an outsized negative impact on your future.

Regardless of whether you ultimately choose to make that withdrawal, you want to make sure the retirement savings you do have are working as hard as they possibly can.

A common retirement rule of thumb, according to money maven Suze Orman, is that you’ll need at least 10x your income saved away to retire comfortably. The reality is far more bleak.

The Transamerica Center for Retirement Studies reports that 17% of retirees don’t even have emergency savings set aside — let alone several times their annual income.

High-yield savings accounts are a great way to earn more on your emergency funds, so that you can stow more of your income toward retirement.

You can check out Moneywise’s top picks for Best High-Yield Savings Accounts of 2024 to compare your options and start building your cash reserve more efficiently.

Diversify your retirement for higher earnings

Beyond CDs and high-yield accounts, you can also invest in the stock market or physical assets for a more secure retirement.

Individual Retirement Accounts (IRAs) help you invest in assets from precious metals to exchange traded funds (ETFs).

With traditional IRAs, you won’t pay tax on the money you contribute. When you retire and withdraw that money, the funds will be taxed as regular income.

On the flip side, Roth IRAs offer tax-free withdrawals at retirement, with the catch being your contributions are made with money you earn after taxes.

For instance, a gold IRA can either fit within a traditional IRA, or a Roth IRA. When you combine gold with your other savings and investment strategies, you’ll help round out your portfolio with a more-balanced mix of risk and return levels.

You can open a gold IRA with the help of Thor Metals to provide a secure and stable investment option for retirement. This can help enhance your diversification, buffering you from economic uncertainties.

Thor Metals is an industry leader in precious metals and authorized dealer for the U.S. Mint and they can help you seamlessly navigate the complexities of setting up and managing your gold IRA.

You can fill out your name and email to get a free 2024 Wealth Protection Guide to help you determine if this investment is right for you and your retirement.

Diversify your portfolio by investing in art

When it comes to investing, a diversified portfolio can lead to better returns. Masterworks' art investing platform has turned a previously inaccessible asset class into an actual option for individual investors. Think of artists like Banksy, Monet or Warhol. Get priority access and skip the waitlist here.

Skip the waitlist

Consistency is key

Speaking of consistency – it holds a special place in the hall of fame for ‘overused financial words’ for a reason.

Plenty of Americans wish they’d actually paid attention to it. 73% of retirees say they should have saved regularly before retirement.

Using a platform like Acorns, an app that automates your investing, can help you ease into those consistent retirement habits. Every time you make a purchase, Acorns automatically rounds up the price to the nearest dollar and places the excess into a smart investment portfolio of ETFs.

They’ll even help you kick-start investing with a $20 bonus when you sign up.

And that’s really what it’s all about: getting started, and sticking to it. Because if you ultimately do follow in Walz’s footsteps, and pull some of that hard-earned money out of the bank, you’ll want to make sure you’re doing everything you can to make up for it.