Should You Tap Retirement Savings to Fund College? There are three things to consider before dipping into retirement savings to pay for college. Share | Have A Question About This Topic? Name Email Address Message Thank you! Oops! Related Content Paying Tax Later Doesn't Always Mean Paying Less 401(k) savings are taxed as ordinary income when funds are withdrawn. Asset Allocation Consider how your assets are allocated and if that allocation is consistent with your time frame and risk tolerance. What Smart Investors Know Savvy investors take the time to separate emotion from fact.