As the GOP seeks to perpetuate tax breaks for the extremely wealthy and totally dismantle the social safety net for everyone else, a new report indicates that nearly one-fifth of full-time employed Americans have raided retirement accounts in the past year to cover financial emergencies. I know I had to take that step when I was forced from a law firm for being gay only to find myself penalized by the IRS and having it held against me in my divorce - even though it's what kept our home from heading towards foreclosure (the rest of my retirement was stripped from me by an anti-gay black judge who stated that sexual orientation was a choice). I suspect most Americans who have had to take this action were faced with either huge medical costs not covered by insurance or faced with job loss and plummeting income. The obvious question becomes WTF are people doing when they fall for the GOP lies and demagoguery? Here are some highlights from Bankrate.com:*
19 percent of Americans -- including 17 percent of full-time workers -- have been compelled to take money from their retirement savings in the last year to cover urgent financial needs, the Financial Security Index found.
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The potential consequences of tapping retirement funds include early withdrawal fees, taxes and the loss of compound earnings -- not to mention the prospect of being unable to retire.
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While workers might be able to replenish the funds pilfered from tax-advantaged accounts once they regain their financial footing, one of the main benefits of long-term savings is time and compound interest. An early withdrawal of $10,000 is not just $10,000. It's actually $10,000 plus whatever that money would have earned over the lifetime of the account. Furthermore, with penalties and taxes an early $10,000 withdrawal may only yield $6,500 if you're in a 25 percent tax bracket.
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While it's fortunate that people do have the retirement savings to fall back on when they absolutely have no alternatives, they may be just delaying the day when they truly have no more resources and working is no longer be an option.
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"That's the scary thing. People are turning to this as a last resort; they have exhausted their other resources. At that point there is very little in the way of alternatives," says Greg McBride, CFA, senior financial analyst at Bankrate.com.
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"Consumers are pessimistic on all five components of financial security. When you look at gasoline prices closing in on $4 a gallon and other events taking place around the globe, it can be unsettling."
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It's a sad commentary on where this country is headed and, if the GOP is successful, suggest that many more Americans will find themselves living in poverty in the elder years. Once again, the party of alleged Christian values is showing its utter disdain for the central Gospel message of love and care for one's neighbor.
19 percent of Americans -- including 17 percent of full-time workers -- have been compelled to take money from their retirement savings in the last year to cover urgent financial needs, the Financial Security Index found.
*
The potential consequences of tapping retirement funds include early withdrawal fees, taxes and the loss of compound earnings -- not to mention the prospect of being unable to retire.
*
While workers might be able to replenish the funds pilfered from tax-advantaged accounts once they regain their financial footing, one of the main benefits of long-term savings is time and compound interest. An early withdrawal of $10,000 is not just $10,000. It's actually $10,000 plus whatever that money would have earned over the lifetime of the account. Furthermore, with penalties and taxes an early $10,000 withdrawal may only yield $6,500 if you're in a 25 percent tax bracket.
*
While it's fortunate that people do have the retirement savings to fall back on when they absolutely have no alternatives, they may be just delaying the day when they truly have no more resources and working is no longer be an option.
*
"That's the scary thing. People are turning to this as a last resort; they have exhausted their other resources. At that point there is very little in the way of alternatives," says Greg McBride, CFA, senior financial analyst at Bankrate.com.
*
"Consumers are pessimistic on all five components of financial security. When you look at gasoline prices closing in on $4 a gallon and other events taking place around the globe, it can be unsettling."
*
It's a sad commentary on where this country is headed and, if the GOP is successful, suggest that many more Americans will find themselves living in poverty in the elder years. Once again, the party of alleged Christian values is showing its utter disdain for the central Gospel message of love and care for one's neighbor.
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