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How to save for retirement while on unemployment
Will the stimulus package address retirement savings losses suffered during coronavirus?
FOX Business’ Maria Bartiromo says having a 401(k) is one of the most important ways to grow retirement wealth and notes $100,000 of IRA savings can be withdrawn during the coronavirus pandemic. Billionaire entrepreneur Mark Cuban encourages people to be patient about not withdrawing their retirement money too soon.
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Franklin D. Roosevelt said, "When you come to the end of your rope, tie a knot and hang on." That's the only option for the millions of Americans who are now unemployed due to the coronavirus pandemic.
The government has implemented stopgap measures to help, including expanded unemployment benefits and stimulus payments, but these are intended to cover immediate households needs. There's no solution right now for minimizing affects the pandemic will have on Americans' retirement.
A 2019 report from fund manager Vanguard shows the median balance in 401(k)s and other defined contribution plans was $58,035 for savers over the age of 65. Across all ages, one-third of savers had balances below $10,000 and only one-quarter had saved more than $100,000. The data were gathered from 1,900 qualified retirement plans with 5 million total participants. Sadly, it seems many Americans were severely underfunded for retirement well before COVID-19 existed. Now, in the face of rising unemployment and market turbulence, the outlook is even bleaker.