Unemployed Workers Using Retirement Funds

July 23, 2012 at 6:04 pm Leave a comment

Last Wednesday, USA Today ran in their Money Section an article by Christine Dugas called “35% of Displaced Workers Raid Retirement Funds to Get By”. Located at http://www.usatoday.com/MONEY/usaedition/2012-07-18-401k-withdrawals–under-embarg_ST_U.htm, the article points out that the reality that participants often dip into retirement savings and default on plan loans after terminating employment.  On the surface, the bad economy would make this seem understandable.  Given many years in the industry, this often occurs regardless of the current economic climate.  The choice is the participant’s, but the participant should also weigh a couple of considerations.  The retirement savings are protected from creditors, and if the participant is older, the more difficult it will be for the participant to put aside enough funds to make up for the lost savings later.

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Christine Gurney

A pension professional who shares her thoughts and ideas about the pension world for industry members and anyone else interested.

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