Protecting Your Retirement From You – by Phil Cannella

With the 2008 recession still fresh on the minds of baby boomers in or near retirement and with the “flash crash” that took place this past August, now is the time to step back and take a look at the versatility of your savings. Over 30 million Americans in the previous 12 months have dipped into retirement savings to pay for an unexpected expense. New research shows this undercuts financial security and leaves the need for every household to maintain an emergency fund. Baby boomers are the main culprits when it comes to premature withdrawals and because of that they are most likely to receive a tax penalty.

Many Americans feel that the effects of the financial crisis are still rippling through the way they work, live, save, and spend. A recent report done by life insurance giant, Allianz, shows 1 in 5 investors experienced at least six different kinds of financial setback during the recession, like a deteriorating home value or the loss of their job.  With a large portion of the population still dusting itself off from 2008, it comes as no surprise that so many are tapping into their retirement portfolio through hardship withdrawals. These are cash withdrawals and loans taken out of savings when they need funds for emergency bills or unexpected repairs. For this reason, senior advocates generally direct retirees to maintain an emergency fund equal to three to six months of living expenses. If you raid retirement savings, it will typically cost you a 10% penalty on top of an additional income tax.

It’s important that you talk with a retirement phase expert about the options you have for managing your money. There are very few consumer advocacy firms in the country that uphold their fiduciary responsibility to each one of their clients.

If you’re looking for a firm that puts your interests above their own, contact