Americans are taking a loan, early withdrawal, or hardship withdrawal from their retirement plans at record rates according to this article from Yahoo Finance.  And, one of the top reasons why, according to the survey, is to pay for a funeral.

 

According to the survey released by by the non-profit Transamerica Center for Retirement Studies (TCRS) in collaboration with the Transamerica Institute, 37% of American workers have taken a portion of their retirement savings, prematurely,  to pay for unanticipated expenses.  The need for these withdrawals is also creating a pessimistic outlook for younger workers on the ability to retire as comfortably as today’s retirees.

 

While the most often reason cited for taking a premature withdrawal from a retirement account is to pay for medical bills, the 7th most often reason is listed as to pay for funeral expenses.  According to the article, “Paying for a Funeral” is cited on 6% of all requests to take a premature withdrawal of one’s retirement account.

 

Steve Parrish, an adjunct professor and co-director of the Center for Retirement Income at the American College of Financial Services, is quoted in the article as saying this about the numbers of withdrawals, “With inflation, economic disruption, and the continuing wealth gap, some of the working population simply needs to access their money now.  That includes tapping their retirement accounts.”

 

Funeral Director Daily take:  This is an issue that management of funeral homes, cremation centers, and cemeteries need to be aware of.  On Saturday morning of last week I was at the local McDonald’s visiting over coffee with some older retired gentlemen.  They all acknowledged that their children are making more in income annually than they ever did. . . .However, they also acknowledged that the current “cost of living” is getting out of control for some of these young people.

 

Tapping one’s retirement savings looks even more likely, at some point in time, when you look at the Bankrate Annual Emergency Savings Report where you will find that 78% of Americans have some type of an emergency savings account.  However, even of those that have these accounts, less than half of them could cover expenses of more than three months.  In addition, over one in five workers has no savings.

 

Moving this article from a thought discussion simply on retirement withdrawals to one of a funeral home or cemetery business strategy, I think the fact that paying for a funeral is in the Top Ten early retirement account withdrawal reasons should be motivation enough for Death Care businesses to push forward even stronger on the idea of Preneed accounts for consumers.  The thought being that if we can get the consumer to “pre-finance” their funeral plans and have that financial obligation taken care of, then we will reduce the numbers of their children or spouses who have to tap in to their retirement accounts to pay for the services.

 

That would be good for these consumers and retirement savers and, . . . . it could be really good for your funeral home!!

 

More news from the world of Death Care:

• Waikato cemeteries “more inclusive” as district council due to adopt new bylaw.  New Zealand Herald (New Zealand)
• God Squad:  Dust to ashes, not dust to dust.  An opinion.  Press – Republican (NY)
• Is it legal to sell human remains?  The Conversation

 

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