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30% Of Americans Have Raided Retirement Savings During Coronavirus Lockdown

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Posted (edited)

Another unspoken casualty. Everyone talks about listening to the public health experts; they are saving your life, so please stay at home.

 

That's great if you can afford to so. E.g. you can WFH and collect your full pre-covid19 salary.

 

But if you can't, as if those impacted didn't have enough to worry about, tack on one more problem they will be forced to deal with. People seem to forget once we get out of this mess, there will be tens of millions who will be so far behind, they will never catch up no matter how hard they try. 

 

 

 

 

Edited by NorCalR1

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And, the crashing stock market has had an effect on any stocks in anyone's retirement savings.

 

I am fortunate in that my financial situation hasn't taken a hit  -- so far.  It will take a huge hit, because I have kids in college, and they have been getting a LOT of help from grandparents.  That money has pretty much dried up.  It means my wife and I will have to contribute more, and the kids will have to take out larger student loans.  

 

My kids have taken something of a hit so far anyway, as far as summer jobs disappearing and the like.  

 

So yes, this is destroying people financially.  

 

One thing, though.  A disease like this was going to crash the economy no matter what.  I am not saying what we should have done.  I am not smart enough to know what the best course of action would have been.  But we can all agree that this really hurts a lot of people.  

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31 minutes ago, BrokeBob said:

And, the crashing stock market has had an effect on any stocks in anyone's retirement savings.

 

 

anyone who is retired and has structured their investments in a way that they can't handle a pullback in equities (something that happens more than once a decade, historically) is doing it wrong.

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27 minutes ago, hegemony said:

anyone who is retired and has structured their investments in a way that they can't handle a pullback in equities (something that happens more than once a decade, historically) is doing it wrong.

AND...most who have a balanced portfolio are probably right about where they were twelve months ago.  I took a look at mom's account with one of the brokerages...it is certainly down from the high-water mark but is still actually a few thousand over the May 2019 level.

 

Some of my own holdings are actually ABOVE where they were at the beginning of March of THIS year.  And I am in position to make an absolute killing on some futures that have seen the underlying equity do extremely well in the past six weeks...

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That's a pretty astounding number.  30% of people withdrew between the dates of March 1st and May 1st.  Talk about a giant sucking sound.

 

It's a little surprising that the stock market has been able to stage a rally with that going on.

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I think there are high expectations, but just as easily, they can fall short. Then again, they might materialize. 

 

I suspect there are far more who have not positioned themselves to hedge their portfolios, than those who have.

 

For the former, especially those who in addition have reduced contributions will potentially be in serious trouble and join the growing ranks who don't have enough to retire on, which just widens the class divide even further.

 

 

 

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14 hours ago, nemo said:

That's a pretty astounding number.  30% of people withdrew between the dates of March 1st and May 1st.  Talk about a giant sucking sound.

 

It's a little surprising that the stock market has been able to stage a rally with that going on.

Not really...the retirement account sellers were panic sellers.  Those that understand the market and remember events of the past 40 years knew, reasonably, that things would rebound and took advantage of those panic sellers.  And by take advantage, it was the stock equivalent of the Ned Beatty scene in Deliverance...

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Posted (edited)
18 hours ago, nemo said:

That's a pretty astounding number.  30% of people withdrew between the dates of March 1st and May 1st.  Talk about a giant sucking sound.

 

It's a little surprising that the stock market has been able to stage a rally with that going on.

I find this quote more astounding: 

"A quarter of respondents are withdrawing money after losing their job."

If this is a representative sample of the U.S. as a whole, not only does it mean the unemployment rate is quite a bit north of 25% (adding the people who were already unemployed), it also doesn't include people who are unemployed but haven't withdrawn money from their retirement accounts.  Who knows how high unemployment really is. 

Edited by Burgerwars

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