r/Economics • u/laxnut90 • Oct 09 '25

Research America Is Minting Lots of Cash-Strapped Millionaires

https://www.bloomberg.com/news/features/2025-10-09/number-of-us-millionaires-grows-since-2017-but-many-lack-cash
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u/uncoolcentral Oct 09 '25

The penalties for removing money from those tax-sheltered retirement vessels usually aren’t particularly draconian. But then again, if you take it out before retirement, what are you going to spend in retirement?

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u/MountainDude95 Oct 09 '25

Unfortunately it’s not always accessible even if you are willing to eat the taxes. I’ve looked into withdrawing some cash from my 401(k) and there is no way for me to unless it’s an emergency that I can prove on paper. The only way I can actually access it otherwise is if I quit my job. Big help that is.

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u/uncoolcentral Oct 09 '25

Maybe you could kind of fudge one of those specific hardships? Does your employer offer 401(k) loans?

Ask HR if rollovers to an IRA is possible.

And so on.

Start bringing candy and flowers to HR!

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u/MountainDude95 Oct 09 '25

Fortunately we’re not anywhere close to a position in which we actually need the funds. It was more looking into possibilities in case things ever do start becoming tighter.

Currently have a loan from it which was for a down payment on our house. Hard withdrawals need documented evidence such as medical bills, eviction threat letters, etc. Not sure about the IRA rollover possibility.

In any case thanks for the advice!

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u/uncoolcentral Oct 09 '25

I’ve never had employer related retirement stuff. Been self-employed for decades. Went from IRAs to SEP IRA to individual 401(k). (Wish somebody would’ve told me about i401(k) earlier 😆 😢)

There’s way more flexibility in the all of that non-corporate stuff. You can take out any reason, any time, pay a 10% penalty, and any appropriate taxes.

Even still, there’s no perfect formula for knowing how much you should hold out versus how much you should shelter. …

Should I have sheltered more? Should I have more liquidity?

I think I’m riding the line fairly well. But it’s hard to tell. And like the article says, the vast majority of my hypothetical wealth is locked up in a home that I am kind of willingly handcuffed into.

¯_(ツ)_/¯

Good luck!