A study released yesterday showed when it comes to our 401k's, more people are either halting their contributions, or pulling their money out of the market all together. We talked to a local financial expert who says that is a big mistake.
Recent nose dives on wall street are enough to send jitters through just about anyone with money in the market. When it comes to retirement funds, like our 401k's, a new report says nearly 4 percent more workers are cashing out, or stopping new payments.
"For people to use that last bit of money up, that's sad, because they're out of bullets, what do they do next."
Local Portfolio Manager Brad Gummow says it's amazing how many people are willing to pay taxes, and the penalties to get their hands on their retirement money.
"30 percent of 401K contributions do not get rolled over for people's future retirement, that it gets spent within one year period of time, it's absolutely incredible."
If our current economic situation has taught us anything, Gummow says, it's to stop the culture of spending, and get out from under that pile of bills.
"It's incumbant upon us to create our own lifestyle and retirement and that can only be done through savings."
And dipping into our retirement savings, he says, should never be considered the answer.
"It's a sad state of affairs because it's going to take an awefully long time to rebuild those monies."
Gummow says, obviously no one can predict how long it will take for our economy to rebound, but he says all the experts agree that eventually it will.