30 million Americans drew money out of retirement savings for emergencies last year, while 21 million didn’t save anything for retirement
Thirty million Americans took money out of their retirement savings for an emergency during the past year, according to a Bankrate.com report. The report also found that 21 million Americans aren’t saving for retirement at all.
Millennials were the least likely to withdraw their retirement funds early, with only 8 percent doing so over the past 12 months. They’re also the age group with an improved overall financial situation over the past year; 40 percent say they’re better off while 11 percent say they’re doing worse.
For 50-64 year-olds, 26 percent say their financial situation has deteriorated over the past year – more than any other age group – and 17 percent recently took money out of their retirement savings to pay for an emergency.
“Using retirement savings to cover an emergency is a permanent setback to retirement planning, with the possibility of taxable distributions, early withdrawal penalties, loss of tax efficiency, and the inability to replace withdrawn funds in future years,” said Greg McBride, CFA, Bankrate.com’s chief financial analyst.
Other information from the survey conducted for Bankrate.com:
- Job security is a strength: people who feel more secure than a year ago outnumber those who feel less secure by more than two-to-one.
- Savings is the one major area where Americans note deterioration, with 30 percent saying they feel less comfortable with their savings now compared to a year ago when 18 percent felt more comfortable.