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 Charitable Giving: Smart from the Heart Do you have causes that you want to support with donations? Federal Income Tax Use this calculator to estimate your income tax liability along with average and marginal tax rates. Paying Tax Later Doesn't Always Mean Paying Less 401(k) savings are taxed as ordinary income when funds are withdrawn.