Recession takes a slice out of retirement

People dipping into savings to pay household bills

This article was published on 07.01.10

Retirement accounts are supposed to be used for retirement, but the recession is forcing a lot of people to dip into them early. As this chart shows, in 2009 nearly one in five Americans age 45 and older prematurely withdrew money from his or her retirement savings to make mortgage payments and pay utilities, health expenses and other bills. Groups experiencing greater hardship—often people of color—were more likely to do so. Since these people already have high rates of poverty, the early withdrawal suggests that they will be even poorer in the future.

Source: Economic Policy Institute and American Association of Retired People (see report at http://assets.aarp.org/rgcenter/econ/hispeconomy.pdf ).