12:57 pm August 20, 2010, by Rana Cash
Disturbing news this morning: A record number of workers made hardship withdrawals from their retirement accounts in the second quarter, according to this Associated Press article.
Under hardship rules, people are sacrificing their retirement savings funds to meet more immediate needs like college tuition, medical expenses, costs relating to the purchase of a primary home, money for payments to prevent eviction or foreclosure, burial and funeral expenses and for repairs for damage to primary homes.
Fidelity reported that about 62,000 initiated a hardship withdrawal in the second quarter, the AP said. That’s up from 45,000 in the same period a year ago, with the average worker initiating a hardship between the ages of 35-55. Additionally, some people have applied twice — paying a 10 percent penalty on their retirement fund as well as taxes.
Question: Have you made a hardship withdrawal? What were the circumstances? Is your 401(k) money considered funds you would never touch?
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