From Retirement Plan To Pandemic Survival Plan
If anyone had told me a year ago that people – among them some of my clients – would be forced to raid their retirement plans in order to put food on the table or to cover basic necessities, I would have rolled my eyes at the ridiculous notion. But, here we are. And that is what is happening all around the country. In the midst of record-breaking job loss and unemployment, people who have diligently saved with the goal of making their retirement years comfortable are scrambling to cover basic necessities. It’s heartbreaking to see this happen.
According to a recent cnbc.com article, “Many Americans are not only decreasing their retirement contributions, but some are raiding their retirement accounts to pay for essentials. A new survey by MagnifyMoney found that 3 in 10 Americans have dipped into the funds meant to be reserved for their golden years — and the majority of those who have done so spent their nest egg on groceries.” https://www.cnbc.com/2020/05/23/26-percent-of-americans-are-raiding-their-retirement-accounts-after-job-loss.html
The challenges families who lost their incomes are now facing cannot be bridged with a single stimulus check. And, there’s no telling if there really will be another one. Even so, one or two checks simply won’t cover expenses for millions of people who lost their jobs.
Fortunately, there is new legislation allowing for penalty free withdrawals under the $2 trillion coronavirus relief package for up to $100,000 from IRAs, 401(k)s and other qualified retirement accounts, at least until the end of this year. So, people are taking advantage of that to make ends meet. But, there’s no telling how all of this is going to play out and affect the once dreamed of golden years of retirement. First and foremost, we have to survive this pandemic. And for those who have retirement plans to raid, that in itself is a blessing considering the millions of Americans who don’t have one to raid.