TRENTON, N.J. (6/10/14)--A New Jersey credit union poll and CEO were the dual pegs of a recent article in The Times of Trenton that spells out a growing, and perhaps disheartening, trend of workers pulling money from their retirement savings too soon (June 8).
The poll, sponsored by McGraw-Hill FCU, East Windsor, N.J., with $312 million in assets, found that employees were more apt to request an advance on their retirement savings over the last year than they were three years ago.
Specifically, 62% of respondents said they had seen a jump in loan requests over the past 12 months, while 44% reported that employees were more likely to request a hardship withdrawal from their retirement savings compared with last year, according to The Times of Trenton article.
Shawn Gilfedder, McGraw-Hill president/CEO, told the newspaper that the problem likely signals deeper financial issues both with the borrower and with the culture of the U.S. workforce.
"More and more, we're being asked to help individuals that have taken loans out against their retirement accounts," Gilfedder told The Times of Trenton. "By the time we get that request, most of these people are heading down a path that we may not be able to resolve."
Added Gilfedder: "That money was meant for a different purpose, and you don't get that money back. We want to get ahead of those people before they decide to do that. When people start sooner in the money-planning process, time is their friend. When they start later on, it makes it much more difficult, and because it's harder, they take on more risk than they should, and that could cause a problem."
The survey, which polled 401 human resource professionals, also found a correlation between the problems employees are having with their finances and their performance in the workplace (See News Now May 16: Financial stress seeps into workers' lives, CU-sponsored survey finds).