When I think about what to write for the BankruptcyLawChicago Blog, many times, I write about a concept in bankruptcy, or why you might consider bankruptcy, or other financial problems that could lead to bankruptcy. Today, I will focus on a habit that can keep you out of bankruptcy, saving for retirement. This MSN Money article shows that nearly one quarter of Americans have nothing saved for retirement. Nearly 1/3 of milennials have nothing saved.
File this in the “bankruptcy prevention” category. Having money saved for retirement doesn’t necessarily prevent bankruptcy. It doesn’t stop you from having out-of-control medical bills, or losing a job, or falling behind in mortgage payments. But, it does give you a cushion for when you retire. And, it gets you in the habit of saving something each paycheck.
Yes, you say, but I need the money? How can I save for retirement if I’m having money troubles? Many employers match your 401(k) contributions. So, whatever you can contribute, the matching funds are “free money”.
But, remember this……. Do not cash the retirement account if you are running low on cash. See my article “The Top 5 Reasons Why You Should Not Withdraw Money to pay off Debt”. Any money you have in your 401(k) or otherretirement account is 100% protected from the bill collectors, even if you have to file for bankruptcy. It is extremely hard to build that retirement fund back up, because you will have less time to do it.
And, if you do have to file for bankruptcy protection, you should definitely start saving money for your retirement again. Or, you should add to any retirement savings. Retirement savings is favored by the government’s tax policies. And, with the way the social security system is going, we cannot count on as much money from Social Security as we get to retirement. So, don’t short-change your retirement, even if you have some problems now.
If you have questions about your retirement money, foreclosure, or bill collectors, or Chapter 7 or Chapter 13 Bankruptcy, give us a call. We can help you, and point you in the right direction.
Daniel J. Winter
BankruptcyLawChicago.com
312-789-9999
Offices in Chicago, Gurnee, Oak Lawn, and Skokie
