The Washington Post published an interesting article Monday that showed one in four Americans with 401(k) and other retirement savings accounts are using them to pay for their current expenses. For millions of Americans, they’re using a quarter of the annual $293 billion deposited for retirement for the now.
According to the study by financial advisory firm HelloWallet, the quarter of Americans are using the withdrawals, loans or cash-outs to pay their mortgages, credit card debt and other monthly bills. One-third of these individuals are in their 40s, a group closing in on retirement.
“But millions of Americans, caught between flat wages and high expenses for everything from sending children to college to making home repairs, feel as though they have little choice. The withdrawals have grown substantially in the wake of the financial crisis,” the article stated.
It should be interesting what the United States looks like in the next few decades as the national debt balloons, the unfunded liabilities and expenditures tsunami engulfs the country and the average American has no more money due to a variety of reasons, such as taxes and consumer spending.
I am 46 and have no retirement. I did have a 401k and cash set aside prior to the 08 crash. That money is long gone as is my house and most of what else we owned. I tell people now that I am retired and they say “wow you must have done well”… I tell them that since I have no retirement and I am not counting on any social security to be there for us, THIS is what my retirement looks like… working til I drop….
don’t feel alone Chris. I’m 56 and I too feel like I’ll be working till the day I die. The American dream is dead and we’re on our own now to fend for ourselves because the government has wasted every taxpayer dime and there’s nothing left for people like you and me.
Unfortunately our government is not very much concerned about people, their well being is much more important to them. Still I have came across one article, unfortunately, I fail to remember the site, where there was given a careful and reasonable explanation to the fact that the withdrawal from retirement plan brings you more saving on interest rate than any other kind of loans. There were even proper examples with calculations.
Jull from http://www.cashloansonlinefast.com/
I am 64 and when I was 20, I too thought I would never see anything from Social Security. Now my wife who never worked outside the home gets $435 and I get $911 for a total of $16,152 per year. I never made more than $25,500 per year while working, but was able to raise 4 kids from 1978 to 2009 without being on any government welfare programs except free school lunches.
What I would tell anyone working today is save 15% to 25% of your income if possible for your future, because SS is not going to be enough. I look around my house and friends and families houses and see tons of stuff that you could do without. Books, toys cds, vds and other things. Adding up to hundreds of dollars, that would of been better off setting in a 401k or IRA.
When I had teenagers at home they did not get their drivers licenses, because I could not afford the insurance.
We even did without a phone for 2 years.
Buy an antenna you can still get free TV, I get 15 channels. Think about every purchase, do I really need it. I spend nothing on Christmas, Birthdays or Anniversary gifts. Except having a good meal and good company.
Never use credit cards for stuff you do not really need and pay them off as soon as you can. I needed a new refrigerator and went to Lowe’s and bought the cheapest one, regular price $850 on sale for $550 with 12 months interest free and I made sure it was paid off before any interest could be charged.
Learn to say NO to yourself, wife and kids. I did and my 4 kids have zero credit card debt. Cars and Homes are the only things
that they buy on credit. I do have about $5,000 in credit card debt, all on zero interest accounts. I love using the banks money and always zero the account balance before interest starts. I can now bank our monthly SS checks, you can to if you save wisely.