As individuals enter the workforce, it is likely that they will begin saving money for retirement. Retirement funds can be vital in the later years of a Tennessee resident’s life, and if those funds are depleted early, that individual could face a considerable financial problem. However, some parties who are facing debt or other money issues may think that using retirement funds could help their predicament. Luckily, there are other options to consider, such as Chapter 7 bankruptcy.
A recent report indicated that older individuals may be likely to use money from their retirement funds in the event than an unexpected expense arises. Nineteen percent of individuals polled who were 65 or older indicated that they had used retirement funds or other savings at some point. This number is more than double the percentage of 18 to 29-year-olds who indicated that they withdrew from savings funds.
Older individuals may think that withdrawing some money may not affect them in the long run because they have potentially accrued a considerable nest egg. However, they could face early withdrawal fees as an immediate consequence, and later, they could find that they were not easily able to replenish the funds that were withdrawn. Taking money out of accounts could also lead to missing out on interest that could have been gained from leaving the funds in the account.
If parties are facing debt issues and think that using retirement funds could be the answer to paying off that debt, they may want to reconsider. Chapter 7 bankruptcy could be an option that allows Tennessee residents to handle their debt issues while keeping their retirement funds untouched. If parties may be interested in this option, gathering more information may allow them to better understand the process.
Source: Fox Business, “When Crisis Hits, Who’s More Likely to Crack Their Nest Egg?“, Janna Herron, Sept. 23, 2015