From Birch Gold Group
For the past six months, lockdowns across the nation have forced millions of Americans out of work, or dramatically altered their income in a variety of other ways (like cutting off sources of paying customers).
Many of those unfortunate folks have had to turn to other sources of money to make ends meet, such as raiding their 401(k) or IRA accounts.
In fact, a recent survey reveals that 30% of respondents have already turned to their retirement plans. Another 19% plan on doing so, but haven’t yet.
More than half of respondents said they spent the money they withdrew on groceries and necessities. You can see the other reasons for retirement plan withdrawals in the chart below:
The chart shows that some Americans had multiple reasons for pulling funds. And it also shows that most of the reasons were fear-based (e.g., job loss, increasing expenses, and losing money in the market).
“There’s no question this is happening, and there’s no question what the reason is: loss of income and fear of loss of income,” said Stephen Brobeck, a senior fellow at the Consumer Federation of America.
But that’s not all the Magnify Money survey revealed:
Notably, one of the generations most likely to pause their retirement contributions was actually the age group closest to their golden years — baby boomers — with 53% stopping their contributions.
So not only have many people withdrawn a portion of their retirement savings, but many have also stopped contributing altogether.
According to a U.S. Census Bureau survey, one reason could be because 32 million Americans had difficulty paying household expenses.
Retirement savers putting their financial future on the line does sound pretty bleak. But there could be a ray of hope…
The Potential Silver Lining in the COVID Cloud
According to a CNBC article, “Savers adversely affected by the coronavirus can withdraw up to $100,000 from these accounts in 2020 without the typical 10% tax penalty. (They’d still have to pay income tax, but it can be spread over three years.)”
What’s more, according to the IRS website, if this withdrawal is repaid to an eligible retirement plan within a specified period of time, “the distribution will be treated as though it were repaid in a direct trustee-to-trustee transfer so that you do not owe federal income tax on the distribution.”
What this means for you is that you can use this limited window of time as an opportunity to shift retirement savings out of equities and into different investments, such as gold and silver.
Of course, any decision regarding your future savings should be made carefully. You should also talk to a tax professional and check what the IRS has to say about the CARES Act before making any decision.
Bottom Line: It’s More Important Than Ever to Examine Your Savings
Whether you consider adding precious metals like gold and silver to your retirement saving mix or not, it certainly doesn’t hurt to “take a look under the hood” and make sure your nest egg is in good shape.
And with only about three months left until this penalty-free withdrawal window closes, you don’t want to wait until it’s too late to make any adjustments you deem necessary.
After 8 long years of ultra-loose monetary policy from the Federal Reserve, it’s no secret that inflation is primed to soar. If your IRA or 401(k) is exposed to this threat, it’s critical to act now! That’s why thousands of Americans are moving their retirement into a Gold IRA. Learn how you can too with a free info kit on gold from Birch Gold Group. It reveals the little-known IRS Tax Law to move your IRA or 401(k) into gold. Click here to get your free Info Kit on Gold.
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Anybody in their 50’s or younger can absolutely give up the idea of any kind of “comfortable” retirement, IMHO. The best you can do is downsize now and be prepared to live a much more austere lifestyle.
Just Sayin’
I would add:
Become as self sufficient as you can.
The FED and the other other banks have screwed the economy so bad there will be no retirement. People will haveto work until they die and die broke.
There will be a tipping point when there are enough poor people. Playing this rigged game will cease and the reset will be attempted.
Get a piece of land and build a shack! Get an RV so you can stay mobile and don’t answer the phone, it’s your kids asking for money!
Have the 2nd, working on the first, land is almost as outrageously expensive as a McMansion nowadays, and the 3rd isn’t going to be a problem as I am exchanging all my spare paper FRN’s in for hard assets.
Just Sayin’
Bingo. Gen X and the Mills won’t “retire”. Hopefully our kids can.
I call bs. Nobody pulls money from retirement to spend on groceries. I guarantee that they all have iphones and probably spend at least $100 a month on a mobile plan and app store purchases, plus probably another hundo on netflix and spotify amazon prime etc etc. THAT is what they are pulling out retirement funds for. And probably a couple hundred a month for junk food.
Haha. Good one. Retirement, or civil war/societal collapse. You say toe-may-toe, I say toe-mah-toe.
In the past, one could save up a nest egg of say, one hundred thousand dollars, or maybe even two hundred thousand dollars and deposit it in a bank that paid 5 or 6% annual interest. For retirees, that meant that they could have a 500 to a 1000 dollar a month income for their retirement and never have to touch the principal.
Now that the Fed has seen to it to ass rape the old people and make sure their cohorts on Wall Street can continue living on easy street, planning for retirement requires a new strategy for a passive income or else you may find yourself living in a van down by the river.
Retirement, voluntarily ceasing productive activity before one is rendered infirm by age, funded comfortably through saving excess (unspent or otherwise pledged) from earned income, and lasting in excess of 15 years was always a Ponzi scheme for the masses. It has been clear for many decades that this pleasant fantasy would end. Now it has.
I may have missed it – I didn’t read the entire article – but I didn’t see an option for “Want everything the fuck out of the American financial system so as to increase self-sufficiency and quit funding my own Wall Street orchestrated demise.”
I won’t buy another U.S. asset that doesn’t produce food or some other mission critical item (e.g. arable land, gold coins to sew into kids’ socks).
The guy at Fidelity asked me why I was willing to withdraw it all and I told him. I can’t imagine I was the first.