BY Ryan Dennin
During time of this recent economic crisis it seems most Americans are going crazy. Since around September it appears that the world has gone “mad” Recently people begin to do things they wouldn’t normally do, and there is quite a bit of fear of the unknown. This is quite understandable, as most of us have never experienced anything like this in our lifetime. As people begin to struggle during a recession they may start to think about tapping into savings accounts, get 2nd or 3rd mortgages on their homes, or even dip into their retirement. The effects of dipping into your retirement should really be the last stop. In fact, in a recent article from “Bargaineering” the blue print is actually quite simple. “the biggest fear you have and the biggest thing you should prepare for is the possibility that you could lose your job. In a recession, companies often scale back operations as sales lag and when that happens employees are often one of the things to hit the chopping block.”
If that is the case it would appear the thing to do is increase savings into 401k or independent retirement accounts and slow down unnecessary spending. Your ability to have a “nest egg” is crucial in a time where you may lose your job. It seems hard to grasp the concept of taking more out of your paycheck when some can barely get by and putting it into 401k accounts, but that is the strategy that long term would make the most sense. It's important to have faith, that this isn't a permanent problem. When the world goes mad, those that follow their daily 401k updates may start to see negative growth, and the desire may be to abandon the concept of contributing at all. CNN Money article says “resist the urge”. Many of us will be working for many years when our economy bounces back from this. The fear of the unknown, and the urge to pull out of our retirement now is the not the answer.