I’m 61, Just Had Surgery, And Can’t Work For Months — But My Daughter’s $32K Tuition Bill Is Due Next Week. Should I Tap Into My 401(k) To Pay It?

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At 61, Robert is recovering from shoulder surgery and out on medical leave from his job as a utility line supervisor. His short-term disability income covers part of his paycheck, but not enough to manage the mortgage, utilities, groceries — and now, a $32,000 fall tuition bill that just landed in his inbox.

His youngest daughter, a sophomore at an out-of-state public university, lives in a campus dorm. That $32,000 covers tuition, housing, and meal plan expenses. Robert has been paying for her education out of pocket so far, just as he did for his older daughter. His oldest son, now 30, didn’t attend college and has been working full-time since his early 20s.

With his recovery keeping him out of work for several more months, Robert is facing a financial wall — and wondering if the only way through it is to pull from his 401(k).

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Robert has roughly $195,000 saved in his 401(k). With no other savings set aside for emergencies, it’s the only account with enough funds to make the tuition payment on time.

Because he’s over age 59½, he wouldn’t face an early withdrawal penalty — but the entire $32,000 would still be taxed as ordinary income, shrinking the final amount he actually receives. Depending on his income bracket, that could mean losing $7,000 to $8,000 to federal taxes alone.

More importantly, what comes out now won’t be compounding for retirement. With fewer working years ahead, the potential loss of future investment growth could total much more than the amount withdrawn today.

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On paper, pulling from the 401(k) seems like a fast, clean solution. But financially, it’s a decision with long-term consequences.

Withdrawing a large lump sum late in your career — especially while on medical leave — can:

• Permanently shrink the retirement account

• Trigger an unexpectedly high tax bill

• Limit financial flexibility later in life

• Delay retirement or force post-retirement work just to fill the gap

Once the money is gone, it’s gone. And without steady income coming in, Robert wouldn’t be able to rebuild those savings any time soon.

Before touching retirement savings, Robert could explore whether the university offers a payment plan or temporary extension — but there’s no guarantee. Some schools allow tuition to be split across the semester or offer short-term grace periods, but these policies vary widely. As an out-of-state student, his daughter may have fewer options.

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If full payment is required to stay enrolled or remain in campus housing, Robert may have no choice but to come up with the money immediately. A partial withdrawal could soften the tax hit and preserve more of his long-term savings, but it still comes with trade-offs.

Robert has already helped two children transition into adulthood without debt, and he’s determined to do the same for his youngest. But he’s now doing it under financial pressure — while recovering from surgery, with reduced income, and limited time left to rebuild his retirement balance.

For parents facing similar decisions, it’s important to treat retirement accounts as what they’re meant for — future income, not emergency tuition funds. Even well-intentioned withdrawals can backfire, especially if they compromise long-term financial security.

Tuition may be due next week — but the bill for an underfunded retirement can come due much later, when there’s no room left to pivot.

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This article I’m 61, Just Had Surgery, And Can’t Work For Months — But My Daughter’s $32K Tuition Bill Is Due Next Week. Should I Tap Into My 401(k) To Pay It? originally appeared on Benzinga.com