If Your Nest Egg is “Broken,” Here’s How to Repair It

By John Whitefoot for Daily Gains Letter | Aug 15, 2013

A growing number of American retirement nest eggs are cracked, and the fault lines are getting bigger.

While the S&P 500 and Dow Jones Industrial Average are enjoying record highs, the same cannot be said for the employment rate. In fact, stubbornly high unemployment and underemployment mean a growing number of Americans have had to dip into their retirement funds—and sacrifice their future stability—just to get by.

While the official U.S. unemployment rate sits at 7.4%, the U.S. Bureau of Labor Statistics reports that the underemployment rate—those who are unemployed, want work but have stopped searching, or are working part time because they can’t find full-time work—remains stubbornly high at an eye-watering 14.2%.

If history is any indicator, it looks as though the underemployment rate will remain sky high for the near future. That’s because more Americans are being forced into part-time jobs to pay the bills. In fact, almost four times as many Americans are taking on part-time work as opposed to full-time jobs—the complete opposite of last year. (Source: Luhby, T., “Want a job? Good luck finding full-time work,” CNN.com, August 12, 2013.)

Why are American companies hiring more temps and part-time workers? It depends on who you ask. Economic uncertainty, weaker consumer confidence, and a lack of consumer demand are certainly major reasons why employers are holding back on hiring full-time workers, but when it comes to the economy, it’s open for debate.

What isn’t open for debate is that more than one-third (36%) of unemployed or underemployed American workers have been forced to tap into their retirement accounts just to get by. On top of that, … Read More