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Bad News Triple Dip

It’s a Tuesday in the middle of January; your first downsized paycheck of 2013 is due today; and chances are you’ll soon get the flu if you don’t have it already. So in the spirit of the day, let’s just get this week’s bad news over with in one fell swoop:

Americans Say Pre-recession Economy Gone for Good

While Americans brace for another year of economic uncertainty, many have given up hope on returning to the pre-recession economy. According to the latest COUNTRY Financial Security Index® survey, just 27% think the old, pre-recession economy will return. Half of these Americans don't expect to see it return until 2015 or later. In this environment, nearly two-thirds (63%) of Americans are “somewhat confident” they can meet their financial goals and needs. However, 27% are “not very confident.”
http://countryfinancialsecurityindex.com/trendrelease.php?tid=37

401(k) Leakage Gets Worse
A report due out this week from the financial advisory firm HelloWallet finds that more than one in four workers dip into their 401(k) accounts to pay their mortgages, credit card debt or other bills. Employees in their 40s have been the most likely culprits — one-third are turning to such accounts for relief.

In 2010, 28% of participants reported having an outstanding loan against their retirement accounts, an all-time high, according to a survey of 110 large employers by Aon Hewitt. And nearly 7% percent of employees took hardship withdrawals that year — roughly a 40% increase since the recession — while 42%  of workers cashed out their plans rather than rolling them over when they changed jobs.
http://www.washingtonpost.com/business/economy/401k-breaches-undermining...

Many Future Retirees Face a Significant Drop in Their Standard of Living

Many of the next-generation retirees are facing a big drop in their standard of living when they retire, according to a new study from the Society of Actuaries. “Individuals need to be aware that attempts to over-simplify the retirement planning process can be very dangerous if used for personal decision making," comments Anna Rappaport, FSA, actuary and report co-author. "Planning for so-called shock events, such as expensive health shocks or ill-timed financial market downturns, must be taken into consideration since they are more likely to derail an individual's retirement plan, especially at lower income levels." Less than one-third of median households will have positive wealth at death, the study found.

http://www.soa.org/Research/Research-Projects/Pension/measures-retiremen...

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