Short on cash for the holidays and thinking of dipping into your retirement funds early? Don’t do it.  It will hurt you, many times over. For starters, you’re pretty much negating all the hard work you’ve done so far saving—and you’re preventing that money from being invested and earning you more money. Second, you’ll be penalized for an early withdrawal, and those penalties can be pretty steep. And third, you’ll have to pay taxes on the money you withdraw. Taking all these factors into consideration, tapping into your retirement early should be an absolute last resort.