My apologies, ChaseMcD. I didnít mean to imply you were making excuses. I only meant that in the past there have been other people who make excuses when they put out a case study. They ask for help and then get offended when people give them some hard truths. It can be tough to take. Heck, Iíve never put out a case study just for that reason. There can be a lot to gain, but you have to be willing to be vulnerable. I just wanted to give you a warning in case you havenít seen it happen yet.
Let me take a step back. Please forgive me if I take it too far and you already understand some of these points.
Every year, the government allows a person to shelter a limited amount of resources in tax-efficient accounts. These would be your 401ks, 403bs, HSAs, IRAs, etc. The accounts available to you will vary based on individual circumstances. These are just buckets for saving your money. You can always fill up this yearís bucket, but you canít fill up buckets from previous years*. Additionally, once you take money out of the bucket, it is often impossible to put it back in.
So if your goal is to have as much money in tax efficient accounts as possible by the time you retire, it makes sense to fill these buckets as full as possible every year and leave it as long as possible. This is the strategy most people here try to pursue.
Sometimes life is shitty and there are only have bad choices to work with. Taking money out of oneís retirement account with a penalty is a bad choice, but itís a better choice than sleeping in gutter or something. However, it would be better to exhaust all other options first. Could this person get a second job? Cut back on their lifestyle? Get a low-interest loan? Get a high interest loan? Take advantage of public assistance? Get scholarships? Get help from a friend or relative? Etc.
So when you say you say ďThe move is not the smart mustachian thing but it is sort of the what the family needs thing,Ē it sounds like youíre desperate. Iím glad to know I was mistaken in that assumption.
Still, you should not cash out that IRA unless itís your last option. Donít use it just because itís there.
*There are exceptions to this. Some accounts give you until April 15th to add to the previous yearís account.