The Rybolts prepared for their future. But once they married this year and joined their families market forces worked against their plans. Keith took a $20,000 pay cut after a lay off. They could not sell either home for what they hoped. And Christina took on her son's car payment when her son lost his job.
"Everything combined just hit us so hard," said Christina Rybolt.
They both took money out of the 401Ks. Over the last year, they took out $12,000.
"I went from having a nice little nest egg that would have accumulated through the years that is pretty much almost gone," said Keith Rybolt.
Sharon Oberlander, managing director of investments at Merrill Lynch, suggests taking a loan against the 401K instead of a withdrawal. She says the penalties for a 401K hardship withdrawal are:
"The minute you pull some out you're paying taxes you're possibly paying penalties you're losing a lot of ground," said Oberlander.
Market losses, layoffs, lost income and unexpected costs are forcing families to find a way through financial hardship. Experts urge looking at all other options before tapping into retirement cash.
Lazetta Rainey Braxton is a certified financial planner with Financial Fountains. She works with clients to find the right solution to their financial goals.
In an emergency Braxton suggests looking at:
"They can have the opportunity to have a couple of decades ahead of them to make up the differences whereas parents don't have the same luxury," said Rainey Braxton.
If you're thinking about credit, before looking to credit cards or payday loans Braxton recommends:
Braxton also suggests:
"Heirlooms that you really would not to let go of but at this time it may just be important to let go," said Rainey Braxton.
The Rybolts say they had tapped other resources and taking the money out of their 401Ks was a last resort. With four kids yet to go to college, they're not sure when or if they'll be able to retire.
"If you can avoid taking it out, avoid it by all means," said Keith Rybolt. "I would have liked to retire at 67. I don't foresee it."
The Rybolts say with their own children they didn't consider moving in with their families. But after seeing the impact of the withdrawal they urge others to consider everything.
Something else to know about a 401K loan: if you leave that job the loan has to be repaid before rolling those funds into another retirement account.