New Report says Over 60% of Unemployed with a 401(k) Are Reaching Into Their Retirement Savings

hcsp.jpgThe jobs crisis is eating into American retirement savings.

In a March 7, 2012, file photo job seekers stand in line during the Career Expo job fair, in Portland, Ore. 63 percent of unemployed Americans with 401(k) savings have withdrawn from their 401(k) plan in order to make ends meet, according to a new survey.

Sixty-three percent of jobless Americans with a 401(k) plan have made a withdrawal from that account, according to a survey released Tuesday by the Transamerica Center for Retirement Studies (h/t the Sun-Sentinel). By participating in this practice, these jobless Americans are putting their retirement at risk by depleting their savings with penalties, while also not accumulating new income or job experience.

The government charges a 10 percent penalty for hardship withdrawals from or cashing out a 401(k) account.

The boost in retirement account withdrawals is just one of the many alternative ways millions of unemployed Americans are finding to make ends meet. The number of Americans on food stamps rose 43 percent over the past three years to 46.3 million.

Many unemployed workers have gotten so desperate that they've completely cashed out their retirement savings. A recent study by Ariel Investments and Aon Hewitt found that among Americans with company retirement accounts that lost their jobs in 2010, 63 percent of African-Americans, 57 percent of Hispanics and one-third of whites and Asian-Americans completely cashed out their retirement savings.

Source: Huffington Post | Bonnie Kavoussi
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