Raiding your retirement accounts can be expensive. Withdrawing money before age 59½ typically triggers income taxes, a 10 percent federal penalty and — worst of all — the loss of future tax-deferred compounded returns. A 30-year-old who withdraws $1,000 from an individual retirement account or 401(k) could lose more than $11,000 in future retirement money, assuming 7 percent average annual returns.
