{
  "id": 4186913,
  "title": "‘You could lose 25% to 35%.’ AARP warns Americans about making this 401(k) move. Here are 4 alternatives to consider",
  "url": "https://urgent.news/2026/08/29/you-could-lose-25-to-35-aarp-warns-americans-about-making-this-401-k",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-08-29T12:15:00.000Z",
  "source": {
    "name": "Yahoo Finance",
    "slug": "yahoo-finance",
    "url": "https://finance.yahoo.com/markets/articles/could-lose-25-35-aarp-121500853.html"
  },
  "original_language": "en",
  "account": "AARP has issued a warning to Americans about the potential financial consequences of withdrawing from their 401(k) accounts before reaching age 59 1/2. Fidelity and AARP, two leading retirement planning organizations, both advise against early withdrawals due to the significant tax penalties and loss of potential growth. According to BetterWallet's Marc Russell, a withdrawal of $20,000 could result in only $12,000 to $14,000 after taxes and penalties. The Internal Revenue Service's rule on premature distributions applies to withdrawals before age 59 1/2, but the pressure to take advantage of early funds has risen due to the rising cost of living. Roughly 6% of 401(k) participants made hardship withdrawals in 2025, up from 5% in 2024. Breaking the 59 1/2 rule may seem like a small price to pay for financial relief, but it could jeopardize long-term savings. Building an emergency fund is recommended to avoid tapping retirement funds, and high-yield accounts can help preserve the purchasing power of uninvested cash.",
  "summary": null,
  "key_points": [
    "Early 401(k) withdrawals before age 59 1/2 incur tax penalties and loss of potential growth",
    "Withdrawing $20,000 could leave only $12,000 to $14,000 after taxes and penalties",
    "6% of 401(k) participants made hardship withdrawals in 2025, up from 5% in 2024"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}