If you’re looking to free up some cash, avoid your retirement funds at all costs. Dipping into your retirement funds early will hurt you many times over. To begin with, you’re reversing all the hard work you’ve done so far with saving it—and you’re preventing that money from being invested. Second, you’ll be penalized for an early withdrawal, and those penalties are usually pretty hefty. Finally, you’ll get hit with a tax bill for the money you withdraw. All these factors make cashing out early a very last resort.