Whether unemployed or still working, many Americans are looking for extra funds during the coronavirus pandemic. About 14% of those with retirement savings have taken money from accounts such as 401(k)s and individual retirement accounts to meet that need. Another 13% of those with savings say they’re planning to make use of their retirement funds.
That’s according to a new survey of over 2,400 U.S. adults surveyed by YouGov on behalf of Bankrate. About 31 million Americans have already made a withdrawal or plan to do so, Bankrate estimates.
To put that number into perspective, over 58 million American workers contributed to a 401(k) plan in 2018, according to the Investment Company Institute, with many more contributing to other forms of retirement accounts. About 85% of Americans have some form of retirement savings, Northwestern Mutual’s 2019 Planning & Progress Study found.
While that seems like a big number, it’s surprising that so few have withdrawn money from their retirement savings to make ends meet, says Blair DuQuesnay, a New Orleans-based certified financial planner and investment advisor at Ritholtz Wealth Management.
“More than 30 million Americans have lost their jobs since early March, and we know that most Americans are unable to afford a $500 car repair, much less fund two months worth of living expenses,” DuQuesnay says. But rather than being forced to use retirement savings, many Americans have been able to get by with the government stimulus checks and the extra $600 a week in unemployment benefits.
Yet with many people already taking a withdrawal and more considering it, it’s worth understanding how this process works and what steps experts recommend you take if you do need to access your retirement savings.