Some Are Tapping Their Retirement Accounts

I remember hearing that congress may pass temorary laws that inhibit the taxation penalties that are heaped on people who decide to tap into their retirement accounts before they are fifty nine and half years old, which is the usual age that most retirement, tax sheltered accounts name as their cutoff for no pre-withdrawal penalties. The reason is that in 2009, many people may have to do exactly that, to cover everything from the mortgage and other related living expenses to their grocery bills.

An increasing amount of people now are doing just this, in an effort to prevent their homes from going into foreclosure, and in an effort to help pay the bills during rough times, especially someone who may be in the sales business which relies on a strong economy and strong consumerism, which is suffering big time right now.

The reasons cited for the surge in early retirement fund withdrawals include exactly what we think they might, and that is job losses so they can cover their expenses on the lower income they receive from unemployment, to cover their mortgages which may have increased if they are subprime, and to pay off credit card debt. You can also achieve this well sometimes by getting a good balance transfer credit card, but some feel that giving up growth on their retirement accounts is worth it.

This unfortuante trend in early withdrawal, which most financial experts say should only be a last resort, is likely to continue into the year 2009, especially seeing how we just got some of the worst jobs data we’ve gotten in the past thirty plus years, and it may even get worse in December and January, which unfortunately are usually big layoff months.