Retirement for the unemployed: a cracked nest egg

The title of a new study on the retirement outlook for unemployed Americans says it all: The Cracked Nest Egg.

And, no surprise, the report from the Transamerica Center for Retirement Studies paints a disturbing picture.

From the non-profit’s report:

– The majority (61 percent) of displaced workers reported having a retirement savings account of some kind. Yet, while 87 percent were familiar with the severe taxes and penalties that may apply when they withdraw funds from those accounts, 35 percent had done so.

– Of those who were in a 401(k) plan at their last  full-time employer, 45 percent had taken a withdrawal from these accounts. Notably, 63 percent of the unemployed had taken a withdrawal, compared to 34 percent of workers considered underemployed.

Among the displaced workers, including those with or without retirement accounts of their own, the estimated median household savings in retirement accounts was approximately $5,800.

“The Great Recession has led to a potentially devastating impact on the retirement outlook of American workers who have become unemployed or underemployed,” said Catherine Collinson, president of the Transamerica Center for Retirement Studies.

“Many have raided retirement accounts to make ends meet – and it will be difficult for them to overcome these savings setbacks once they regain employment.”

Collinson added that, “Older workers have been hit hard by unemployment or underemployment and they are at greatest risk. Many face challenges finding employment and, when they do, they will have much less time than younger workers to rebuild their savings before they reach retirement age.”

The survey also found that many displaced workers have relied on personal savings and/or gone into debt since becoming unemployed or underemployed.

Among the other findings:

– More than half (51 percent) have tapped into savings accounts.

– Nearly one‐third (31 percent) have used credit cards, suggesting an increased likelihood of future carry‐over balances.

– One in four (24 percent) have turned to family and friends for loans.

– Three in ten (30 percent) do not have health care insurance, broken into 34 percent of the unemployed and 27 percent of the underemployed.

8 comments Add your comment

Jack

July 18th, 2012
9:27 am

The credit for the cracked egg goes to Barney Frank; he championed the sale of houses to those whom he knew could not repay their mortgages; hence the recession.

BUCKMASTER

July 18th, 2012
10:22 am

@Jack………….

You got it Jack… They sold them liar loans and intrest only knowing full well tey were going to get them houses back at the end of five years when the principal kicked…. Then they went crying to the fed….. Like A little kid thay had just crapped his drawls.. saying LOOK WHAT HAPPEND Bail us out….And the rest is history….The time for revolution has passed…..Welcome the new USSA……….Bless

Sean Hannity

July 18th, 2012
12:02 pm

@Jack

Good monkey. You get a banana.

cashout

July 18th, 2012
12:05 pm

My retirement money? In bad shape. I just checked my 401K—it’s down to a 101K.

mary

July 18th, 2012
12:59 pm

Gosh, I didn’t realize Barney Frank held such power over the economy! I guess the U.S. wasn’t very powerful to begin with if you’re giving so much credit to one guy for toppling it all.

Peach Fuzz

July 18th, 2012
9:57 pm

This shouldn’t come as a surprise to anyone. The entire economy is rigged to keep everyone in debt with inflation.

GeoffDawg

July 19th, 2012
4:08 pm

Jack’s right about Barney Frank regardless of the intellectual shortcomings of mary and fake Sean Hannity.

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