Question:
❓After a big medical bill, which move can hurt your retirement the most?
A) Put it on a credit card
B) Use an emergency fund
C) Stop retirement contributions for a while
D) Pull money from a 401(k) or IRA
Answer:
✅ D) Pull money from a 401(k) or IRA
Here’s why:
Some people don’t realize you can take money from certain retirement accounts to cover unreimbursed medical expenses above 7.5% of your income—and skip the 10% penalty.
But you’ll still owe income tax, and you lose all the future growth that money could’ve earned. A $10,000 withdrawal in your 40s can mean $25,000–$30,000+ less by retirement.
The others?
A) Credit cards hurt with interest, but you can recover once paid off.
B) An emergency fund is meant for this—better to use that than touch long-term money.
C) Skipping contributions for a bit slows things down, but your existing savings still grows.
Taking money out of retirement, though—that’s a hit you can’t easily recover from.
