Thirty million Americans tapped their retirement savings for an emergency within the past year, a Bankrate.com report finds.
The report also finds that 21 million Americans aren’t saving for retirement at all.
Surprisingly, millennials were the least likely to dip into their retirement funds prematurely (only 8% did so over the past 12 months).
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In fact, millennials are the most likely age group to note an improved overall financial situation over the past year (40% say they’re better off and just 11% say they’re doing worse).
The numbers tell a more troubling story for those between the ages of 50 and 64. Twenty-six percent say their financial situation has deteriorated over the past year (more than any other age group) and 17% recently dipped into their retirement savings to pay for an emergency.
“Using retirement savings to cover an emergency is a permanent setback to retirement planning, with the possibility of taxable distributions, early withdrawal penalties, loss of tax efficiency, and the inability to replace withdrawn funds in future years,” says Greg McBride, Bankrate.com’s chief financial analyst.
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