Recently, a Reddit poster told a story of a person he’d met who cashed out a 401(k) to try to make it onto a pro golf tour.

The Redditor said the guy had been at his job for 13 years before cashing out his retirement account. And, while he was good at some aspects of the golf game, his skills were questionable in others. The Redditor wasn’t sure if the golfer was “filthy-rich” and living a dream, or simply crazy.

Unfortunately, the wisdom of the man’s decision to cash out his 401(k) is even more questionable than his golf skills. Here’s why.

Cashing in a 401(k) is never the right option

The sad reality is that cashing in a 401(k) is pretty much never the right choice — no matter what dream you are chasing. It’s also not something that a wealthy person is likely to do… at least not if they want to stay wealthy.

A 401(k) is intended for retirement savings. It comes with tax advantages. Since you can contribute to the account with pre-tax funds, each contribution costs you less. However, the catch is that you can’t just take out the money whenever you want. With few exceptions, you have to leave your money invested until 59 1/2 to avoid being hit with a 10% early withdrawal penalty. You are also taxed on withdrawals at your ordinary income tax rate.

If the would-be pro-golfer withdrew money before the traditional retirement age, he would have lost a good portion of the funds he took out to the IRS, which is a huge waste. For each $10,000 he withdrew, he’d have lost $1,000 to the penalty alone — and if he was in the 22% tax bracket, up to $2,200 more would have disappeared.  This would seriously diminish the value of the account.

Of course, he’s also created a situation where his retirement is at risk. You can’t live on Social Security alone, as Social Security only replaces about 40% of pre-retirement benefits. You need 401(k) distributions (or distributions from other retirement accounts) to help you afford your lifestyle as a retiree. Since this man has raided his 401(k) plan, he won’t have these funds.

If he doesn’t succeed at becoming a pro-golfer, which is a pretty hard thing to do, he could get stuck working far into old age to make ends meet or may simply not have the funds he needs for a comfortable future.

Leave your 401(k) money alone to avoid regrets

While there are sometimes ways to access your 401(k) without an early withdrawal — such as by taking a loan against your account — the reality is that you are likely to regret any early withdrawals from your retirement plans.

When you take out money ahead of schedule, you lose not only that money but also the returns that money would have earned.  Since you don’t pay taxes on gains as you earn money in your 401(k), this comes at an even bigger cost than missing out on returns in a standard brokerage account.

If you want to chase your dream of becoming a pro golfer, you should save enough money in a taxable brokerage account to pursue that goal. You can work with a financial advisor to create a plan to do that. And the same is true for any other objectives. Unless you are facing extreme financial hardship with no other solutions, your 401(k) money should be left alone until you have reached retirement age and are confident your funds can support you throughout your retirement at a safe withdrawal rate.  This is the only option if a secure retirement is also one of your dreams.

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