WASHINGTON – Financial planners always tout the benefits of 401K savings plans. But under some circumstances, savers might be better off putting their money elsewhere.

“If you don’t have money stashed away for emergencies like health care costs or potential loss of job, you’re really doing yourself a disservice,” says Cliff Goldstein from Nerd Wallet.

Goldstein says people need to have at least six months of income stashed away for possible hard times. Without such a reserve, individuals who turn to 401Ks for emergency money could face steep penalties for early withdrawals.

The tax-free savings and employer match are important benefits of 401K plans, and Goldstein agrees that it’s a good idea to be contributing at least as much as your boss will match.

But you also might want to reconsider 401K savings is if you’re in debt.

“Especially if you have interest rates in double digits, you probably want to tackle that before you start saving for retirement,” Goldstein says.

He says there are many factors when debt is involved and it may be a good idea to work with a financial advisor.

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