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Part: 2 Savings > Using a 401(k) to Achieve Your Other Financial Goals - Pg. 81

81 Chapter 8. Using a 401(k) to Achieve Your Other Financial Goals In This Chapter · Dumb ideas · Good uses of 401(k) plans · Determining how much to save for that nonretirement goal With all the restrictions and penalties that the IRS assesses for early withdrawal, it's obvious that those guys in Washington intended for us to use our 401(k) plans just for retirement. But can you have your cake and eat it, too? Well, maybe you can at least lick the frosting before you have to put it back in the box. Can you--or should you--use your 401(k) plan to achieve other financial goals? And, more importantly, does it make financial sense to do this? The answer is ... sometimes it does make sense, and sometimes it doesn't. Unfortunately, a 401(k) plan is not the Swiss army knife of financial tools. You can't get it to accomplish everything, but you can use it for some of your other financial goals. We can't assume that everyone has only "invalid" uses for their money besides retirement. So, without being too judgmental, we offer our opinion on the dumb uses and some examples of good uses for your 401(k) plan assets. But first, here are some general rules to live by. Your mother probably already gave you these, but it never hurts to hear them again. Sneaking Your 401(k) Past Uncle Sam If you use your 401(k) loan option the right way, Uncle Sam will help you to finance your nonretire- ment financial goals. You pay yourself back what you have borrowed, and you reach your goal.