Financial expert explains retirement-saving traps to avoid
foxbusiness.comRamsey Solutions financial expert George Kamel on how to take charge of your retirement.
Americans are feeling the sting of economic hardship and are turning to their golden nest eggs to supplement their expenses.
However, one financial expert explained why that is a bad idea.
«Your 401(k) is not your piggy bank to dip into,» George Kamel said on "Mornings with Maria," Tuesday. «That's why you have an emergency fund.»
A recent Bank of America report found that a growing number of 401(k) participants took hardship withdrawals in the second quarter of 2023.
HARDSHIP WITHDRAWALS FROM RETIREMENT ACCOUNTS INCREASED IN THE SECOND QUARTER: REPORT
The Ramsey Solutions financial expert stressed that while many Americans "don't have any money saved," turning to these «shortcuts» is not a «good plan,» and highlighted the retirement saving traps to avoid.
«Live on less than you make,» he said. «Too many people are not spending less than they make.»
«They're, comparing their life to others. They're trying to keep up with the Joneses. They're not budgeting. They're not investing, and they're trying to do it all by themselves, and that can lead to a lot of mistakes that can cost you big time,» he said.
A stack of retirement account statements. (iStock / iStock)
Kamel pointed out how doing a «few basic things» such as investing in your 401(k) without dipping into it can lead to a retirement with some «dignity.»
He also explained how contributing to a Roth IRA could be beneficial, but stressed the importance of working with a financial adviser to understand the different strategies.
«This is after tax money that grows tax-free,» he said. «And what I love about this is if you have $2 million sitting in a Roth account, that's $2
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