March 2, 2021 - Douglas Myser

Americans draining retirements due to covid. Nearly 60% of Americans withdrew from their retirement accounts during the pandemic, according to a recent survey from finance magazine Kiplinger and Personal Capital, a wealth management organization. The pandemic caused many people to borrow from their future in order to meet everyday needs throughout state shutdowns and the highest number of job losses since the Great Depression. According to the survey, in 2020, most people between the ages of 50 and 74 were forced to drain funds from their IRA or 401(K). While 63% of those surveyed said they primarily used the funds to cover everyday living expenses, other respondents cited medical bills, home repairs, and funding for other family members. The withdrawals were not small sums either. Most withdrawals from retirement accounts represented significant amounts of money, with about one third of respondents withdrawing over $75,000. Americans draining retirements due to covid.

The Kiplinger survey was conducted during the end of the year and included 744 respondents between the ages of 40 and 74, evenly split between genders with retirement savings of at least $50,000. The online survey has a 95% confidence level. "The past year rocked the confidence of most Americans saving for retirement. For many Americans, the pandemic has caused a major setback in their retirement plans. More than half of the respondents said they planned to work longer or delay retirement as a result of the financial circumstances of the past year. While the US Government tried to implement bills that would spare Americans from the financial consequences of the pandemic, nearly 30% of the Americans surveyed took out loans through the CARES Act signed into law in March, which permitted loans of up to $100,000. 58% of those who took loans borrowed between $50,000 and $100,000.

As the pandemic has forced more people to dig into their retirement funds, many Americans may be forced to rely on Social Security. The Center on Budget and Policy reported that 20% of retirees depend upon Social Security. If you drained a 401 (k) due to Covid, you may be eligible for options that exist in the IRS tax code. Our Tax Resolution Company, a 36 year old company, respected among other Tax Resolution Companies,  knows all of those options, not just the IRS Fresh Start Program. We have a easy approach to Tax Resolution that is stress free for our clients. IF the IRS has a IRS Wage Garnishment or  Bank Levy on you, we can help. Call for a Tax Resolution Services consultation today. 1-888-689-7861