Americans Turn to Retirement Accounts for Income

One of the features of retirements accounts is that you have the ability to borrow against them. And, increasingly, Americans are turning to their 401k retirement accounts for money. Emergencies like job loss, unexpected medical problems and other economic troubles are causing Americans to consider taking money from their retirement accounts in order to smooth the way.

While there are ways to avoid penalties on the money taken out for 401k retirement accounts, it still reduces the overall money you save for retirement in the end. The 401k is preferred because it is easier to access that Roth accounts and pension plans.

MSN Money reports on a study done on the subject by that Center for American Progress:

“They don’t necessarily pay penalties. But the penalty is that they have fewer retirement savings,” said Christian Weller, an author of the study.

As economic conditions grow bleaker, the number of people dipping into retirement money will only rise, he added.