Retirement savings accounts are the only option in the case of over 60% of those who are unemployed or underemployed across the nation according to a recent survey.
A recent survey by the Transamerica Center for Retirement Studies, reports NJ101.5, found more than a third of those unemployed or underemployed are having to dip into their retirement savings and 401k .
Ken Kamen with Mercadien Asset Management in Princeton makes note that this “savings raids” trend is not just Americans who are acting irresponsibly stating:
“The reality of it is – people have to dip into [retirement] savings to live. Incomes haven’t been growing and jobs have been shaky, at best.”
Kamen does, however, strongly advise against borrowing from your 401k retirement savings plans, referring to it as a “last, last, last” option.
The Sun-Sentinel also points out that middle-aged displaced workers are the greatest risk because of their low amount of retirement savings. The survey showed that those in their forties and fifties had only and estimated median retirement savings of $2300 left in their 401k.
Many are having to apply for food stamps and obtain other services with the help of social workers because they’ve exhausted their savings while trying to find new work. There are over 5 million long-term unemployed looking for work for 27 weeks or more. One social worker stated:
“We’re hearing more people say: ‘We have nothing left.’”
South Florida social workers say they have had to teach many of the jobless how to apply for food stamps and obtain other services after they have exhausted retirement savings while trying to find new work. The job search can take months – if not years. There are more than 5 million long-term unemployed in the United States who have been looking for work for 27 weeks or more.
Harry Nash lost his job in 2010 and ended up depleting his 401k account going through $20,000 before finally finding work again. According to Joyce Curtis, executive director of the nonprofit Jubilee Center of South Broward, he’s not alone:
“We have had this epidemic of middle-class people slipping into poverty – it’s terrible.”