I had said that one of the problems with the coronavirus and the CARES Act is that participants would raid their retirement accounts, especially if they were terminated. Of course, I was right.
A new survey by MagnifyMoney found that 30% of Americans have raided their retirement accounts for early distributions and the majority of those who have done it, used it to spend on groceries.
The survey found that 47% of savers have either stopped or lowered their retirement savings contributions amid the coronavirus pandemic. 21% have reduced their contributions, while 26% have stopped saving altogether. 3 in 10 participants have withdrawn funds from their accounts within the last two months. Another 19% said that they plan on doing so but haven’t yet.
This comes as absolutely no shock because when times are tough, people raid their retirement accounts because so many Americans live hand to mouth.