Ohio residents of any age can face a financial emergency. In some cases, parties who have retirement funds may believe that using these funds for an emergency rather than their intended purpose could help them out of a tough spot. However, using retirement funds could cause problems in the future when that money is needed. Other alternatives, such as Chapter 7 bankruptcy, may be worth considering.
It was recently reported that older individuals are more likely to take money from their savings or retirement funds in order to handle a financial predicament. Statistics indicated that 8 percent of individuals ages 18 to 29 stated that they used some sort of savings for one reason or another, and 19 percent of individuals 65 and older indicated that they had used savings. Additionally, many individuals stated that they could not answer the question because they did not have any savings to use.
Because older individuals have potentially saved a considerable amount of money for retirement, they may not think that using some of that money will be a problem. When money is used from retirement funds, however, plans surrounding those funds could be negatively affected. Furthermore, individuals could face fees for using retirement funds early.
If parties are facing a financial emergency or debt crisis, they may want explore other options rather than using retirement funds. Chapter 7 bankruptcy could be a relief method that may help parties handle debt and leave retirement funds intact. In many cases Ohio residents' retirement funds are not affected by bankruptcy. If individuals are interested in seeking financial help, gathering more information may be the best first step.
Source: Fox Business, "When Crisis Hits, Who's More Likely to Crack Their Nest Egg?", Janna Herron, Sept. 23, 2015