Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (270160)	8/20/2010 6:48:47 AM
From: DebtBomb	Read Replies (3) \| Respond to of 306849

There's nothing left but the crying. No home equity, no rates to cut, no 401k, no retirement, no job, no oil....nothing but the DEBT BOMB. 41 million on food stamps, 20% unemployment, 20 million abandoned houses. The banksters have milked everything dry....and stole all of the money. It's like darwinism....survival of the fittest....see who's the last man standing. Fidelity: 401(k) hardship withdrawals, loans up Fidelity: Struggling workers increasingly tapping 401(k) accounts for needed cash .David Pitt, AP Personal Finance Writer, On Friday August 20, 2010, 12:04 am EDT In the wake of news about a spike in new applications for unemployment benefits comes another potentially troubling sign: A record number of workers made hardship withdrawals from their retirement accounts in the second quarter. What's more, the number of workers borrowing from their accounts reached a 10-year high, according to a report issued Friday by Fidelity Investments. The trends reflect the financial stress many workers find themselves in as the economy struggles to find sure footing, said Beth McHugh, Fidelity's vice president of marketing insight. High unemployment and companies cutting back on overtime or overall hours have reduced the take-home pay of many workers. "People tend to be taking home less," she said. "As a result the percentage of individuals initiating hardship distributions is one of the things we're concerned about." Fidelity administers 17,000 plans, which represents 11 million participants. In the second quarter, some 62,000 workers initiated a hardship withdrawal. That's compared with 45,000 in the same period a year ago. What's also eye-opening is that 45 percent of participants who took a hardship withdrawal a year ago, took another one this year, McHugh said. To be eligible for a 401(k) hardship withdrawal, individuals must demonstrate an immediate and heavy financial need, according to IRS regulations. Certain medical expenses; costs relating to the purchase of a primary home; tuition and education expenses; payments to prevent eviction or foreclosure on a primary home; burial or funeral expenses; and repair of damage to a primary home meet the IRS definition and are permitted by most 401(k) plans. A key concern is that these withdrawals are just that, they are not loans. As a result there can be a significant impact on someone's overall retirement savings. If the worker is younger than 59 1/2, they'll pay a 10 percent penalty for early withdrawal in addition to taxes. The average age of the workers taking hardship withdrawals is between 35 and 55, their peak earning years. It's also often a time when competing financial challenges emerge, McHugh said. The good news in the report was that the average 401(k) account balance as of the end of the second quarter was $61,800; up 15 percent from the same time last year, but down from the end of the first quarter of 2010. finance.yahoo.com