retirement

Tapping retirement savings

 

 

[Begin VIDEO with Kristin Arnold, Bankrate.com anchor introducing the video topic]

KRISTIN: Economic times have been tough for consumers, no doubt. Bankrate.com is out with their Financial Security Index for April and found some interesting information about how many people are tapping retirement accounts for emergency purposes. Here to discuss is Greg McBride, senior financial analyst at Bankrate.com.

[Cut to a double screen of Kristin Arnold and Greg McBride]

KRISTIN: What percentage of people are tapping retirement savings for emergencies?

GREG: Nearly one in five, 19 percent of Americans have tapped their retirement account, and that's just in the last 12 months. Also, it's not confined to people who are out of work, we found 17 percent of those employed full-time, admitted to having done so in the last year. Now, tapping that retirement account is really a last resort. It depletes your nest egg, subjects you to taxes and penalties and it deals a permanent set-back to your retirement planning because you can't go back and make up for those withdrawals you've taken. So, this really illustrates just how many people are at the end of their rope.

KRISTIN: What are Americans saying about their overall financial security?

GREG: We got a pretty dire reading from consumers in the month of April. The Financial Security Index fell to a new low and one-in-three Americans now say their overall financial situation today than it was 12 months ago.

KRISTIN: This surprising considering the evidence of an improving economy, right?

GREG: Yeah, the data is showing job growth. It's showing lower debt burdens, it's showing higher net-worth, particularly among higher income households. But these results really illustrate just how many Americans out there aren't feeling it.

[Cut to one shot of Kristin on camera]

KRISTIN: Ok, thank you Greg. Hopefully, we'll see some better news in next month's index. To read about more about April's retirement savings financial security index, just visit Bankrate.com. I'm Kristin Arnold.

 

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