When it comes to saving for retirement you should not depend solely on Social Security to provide for you during your retirement.  Social Security is going to come under pressure as the baby-boomer generation retires with fewer working-age adults to pay into the Social Security Trust Funds.  The US Social Security Administration collects payroll taxes from current workers and uses the money collected to pay for old-age, survivors, disability insurance benefits in the form of a Trust Funds.  Moreover, people are living longer than before which will further strain the program's trust funds.

Given the bleak outlook for Social Security Benefits, If you are considering cashing out your 401k plan, 403b plan, IRA, or other pension/retirement account, you should think twice.  Not only do you want to avoid early withdrawal of your pension to continue your standard of living into your retirement and to provide a cushion for any health problems but also to avoid taxes and penalties for early withdrawal.

If you are cashing out your pension to catch-up on arrears on your mortgage, car payments, credit card payments, you will find yourself with a hefty tax liability compounded with interests and penalties.  You will be back where you started from.  Recent tax debts are not dischargeable in bankruptcy but credit card debts are dischargeable in bankruptcy if you qualify.  An alternative to catching out your pension to avoid foreclosure or repossession is a Chapter 13 Bankruptcy, which allows you to catch-up with the arrears.

Of course, bankruptcy is not fore everyone.  You should speak to an experienced bankruptcy attorney in your area.  Muoi Chea, Bankruptcy Attorney, has been providing Chapter 13 and Chapter 7 Bankruptcy services for years with Offices in Sacramento, Stockton, and Fairfield, California to help get people out of debt throughout Northern and Central California.