NEW YORK (MainStreet) It's common knowledge among financial advisers and probably among middle-age adults sitting at kitchen tables all over the country that Americans are anxious over their retirement funds.
Transamerica says those displaced worker have suffered financial setbacks, such as a job loss or getting their hours cut at a job and working only part time. With 97% of all jobs created so far this year classified as part time, Transamerica expects that trend to continue along with some bad financial habits.
"Amid signs of economic recovery and an improving unemployment rate, millions of Americans are still unemployed or underemployed," says Catherine Collinson, president of TCRS. "Many displaced workers have raided their retirement accounts to make ends meet, and many may be overlooking the importance of retirement benefits as they seek meaningful employment. It's critical that we raise awareness of the issues and identify opportunities to help them rebuild their long-term financial futures."
Transamerica reports the following on displaced workers:
- 59% of displaced workers have a retirement account.
- 36% of those workers have already raided that retirement account for much-needed cash.
- Among U.S. displaced workers, the average amount stashed away in retirement accounts is disturbingly low $7,500, with workers in their 50s having only $16,000.
How long people are either out of work or "underemployed" is a big factor in retirement fund troubles.
"The passage of time out of work, especially the one-year mark, can have a detrimental effect on retirement accounts," Collinson says. "Forty-two percent of those displaced for a year or more took a withdrawal, compared to only 23% of those displaced for less than a year."