An estimated 20 percent of seniors work or are looking for work, which is twice as many as 20 years ago. Of course, there are many reasons for this. It might be a desire to remain active. It could be that finances are dictating a working life beyond the traditional retirement age of 65. It could be a chance to launch a second career that we always dreamed about.
Saving for retirement is tough enough. You’ve got to earn a living, sock a portion away on payday, invest it wisely, and emotionally weather the periodic market sell-offs. However, life’s surprises shall come your way – job loss or change, a major medical bill, education costs and others – and may cause (or tempt) you to tap your retirement savings early. The purpose of this article is to discourage you from creating pre-retirement leakage from your 401(k) and IRA account balances which can cost you up to 25 percent.
If you flip through the pages of the latest business magazine or read the online headlines you might be under the impression that twenty-somethings are leading a surge in entrepreneurship while baby boomers settle for more traditional business roles. The reverse is actually true. As Dane Stangler of the Kauffman Foundation noted in testimony before the U.S. Senate last year, “Americans in the 55-64 age group start new businesses at a higher rate than those in their 20s and 30s. This has been true, by the way, in every single year from 1996 to 2013.”
401(k) plans are, of course, not the only way that people save for retirement. Many people still have pensions or use individual retirement accounts (IRAs) or another qualified plan; the data is simply more accessible for 401(k) plans. Is a million-dollar plus 401(k) or retirement fund a possibility for you? Probably.