Life doesn’t always follow the script — especially when it comes to money. While retirement might be on the horizon, you might need to cover a major purchase or deal with unexpected events. Home repairs, medical needs or family milestones like weddings can crop up just when you hoped to boost savings on the homestretch to retirement.

If you have a gap between the funds you need and what you have, and the expense can’t be reduced or delayed, the first place to turn is typically excess cash, or — for unexpected and necessary expenses — your emergency fund.

But when these aren’t enough, you may need to explore additional options, like using investments. Two common options for retirees and pre-retirees are taxable investment accounts and retirement accounts. Here’s what to consider.

1. Using taxable investment accounts

Selling investments

Selling investments can be an effective way to access cash, but be mindful of the following:

  • Capital gains taxes: Selling assets that have appreciated may trigger capital gains taxes, which can increase your taxable income and potentially push you into higher tax brackets or trigger surcharges. Strategies such as tax-loss harvesting may help manage the impact.
  • Costs and fees: Transactions can involve fees and other costs that reduce your net proceeds.
  • Asset allocation: Your portfolio was built around your goals and risk tolerance. After selling investments, be sure to rebalance so your allocation remains aligned with your strategy.

Alternative option: securities based loans

Rather than dipping into your investment accounts, you may have the option to borrow against them.

This approach allows you to keep your money invested and potentially growing. But consider:

  • Margin calls: If the value of your investments drops too far, you could face a margin call, requiring you to repay part of the loan or add more collateral. Otherwise, the investments could be sold.
  • Interest costs: While you avoid taxes and fees tied to selling investments, you will pay interest on the loan.

2. Using retirement accounts

Withdrawing retirement funds

You can tap retirement savings to meet a shortfall, but consider the implications:

  • Impact on retirement readiness: Withdrawing funds now may require increasing future savings, postponing retirement or adjusting future spending.
  • Plan restrictions: Employer plans — such as 401(k)s and 403(b)s — can limit withdrawals while you’re still employed.
  • Taxes and penalties: Tax treatment varies depending on whether the account is traditional or Roth. Early withdrawals (before age 59½) may trigger penalties unless you qualify for an exception.
  • Mandatory withholding: Certain distributions require tax withholding at the time of withdrawal. Check with your plan or IRA custodian.

Alternative option: employer-sponsored plan loans

Employer plans may allow you to take a loan against your balance while employed, which can give you access to funds without immediate taxes or penalties. Keep in mind:

  • Potential missed growth: Borrowed funds aren’t invested, which means missing potential market gains while the loan is outstanding.
  • Costs and interest: Plan loans may include origination or maintenance fees. While you’ll pay interest, it’ll go back into your account.
  • Repayment rules: Most plans require at least quarterly payments, typically over no more than five years.
  • Contribution limits: Some plans restrict new contributions during the repayment period, which can also affect your ability to earn any employer match.
  • Risk of unintended distribution: If you leave your employer or miss payments, the remaining loan balance may be treated as a taxable — and potentially penalized — distribution.

Finding the right path forward

If a financial need exceeds your available cash, remember:

  • You likely have multiple funding options.
  • When using investments, weigh whether taxable or retirement accounts make more sense.
  • Compare these choices to alternatives such as life insurance cash value or traditional borrowing solutions.

Most importantly, talk with your Edward Jones financial advisor, who can help evaluate the trade-offs and recommend a strategy that supports your goals — both today and throughout retirement.