Thinking Before Saving: Why I Changed my Retirement Savings Plan
Carmen Reinicke

A few notes: Taking money out of an IRA is generally a bad idea because every day that you don’t have that money invested is a day that you aren’t making interest off of it (and interest off of that interest and interest off of that interest . . .). If you keep money out of an IRA for long, that’s *a whole lot* of money that you lost out on. And that lost money could well mean that you don’t have enough money to retire on.

I know that a lot of people raid their IRAs for money to build a house or go back to school or what not, but it’s worth considering that:

A) If you don’t have enough money to pay for retirement, you might lose the home anyway.

B) It is quite possibly worth taking out a loan to finance the home or the college or whatever it is that you need to pay for. At least you’ll know that whether you pay off the loan, your retirement nest egg will still be capitalizing interest and be waiting for you intact (Bankruptcy — at least some forms of it — allows you to keep your IRA [But check the local laws; they can differ from state to state.]).

C) There may be times when you absolutely have to take money out of an IRA to fund a life-saving operation for your child or something, but a good rule of thumb is that unless it’s a matter of life and death, the money in your IRA stays in your IRA until you retire.

So basically, Carmen isn’t wrong in her assessment, but that assessment should come with a giant warning label.