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Former Paine Webber CEO Don Marron on the rise in the number of Americans taking out money from their retirement funds early.
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-- okay -- are so tapped out one in four are tapping into their retirement accounts just to meet basic expenses.
-- -- saying that as of 12% in the last four years Wall Street legend Don Marron on a trend.
This is nobody's friend you -- done to your credit warning about there's some time ago.
Even in the go go appeared before the -- -- -- renounced his propensity of the part of Americans.
To tap what aren't supposed to be -- sacrosanct.
Funds for retirement.
Like to cash register now understandably.
More so.
In an environment like this why do you worry about.
Well first when they started this they're replacing the pension with a 41 -- And they -- two things first the money would go away and it would stay there and second will be run properly -- neither one -- happen.
Hasn't been run properly because individuals are trying to oversee something -- -- not qualified for.
And people have been take -- -- money out so this probably estimates -- 80%.
But what's supposed to be there -- the problem is the people who are most likely be taken the people for lower income levels we're going to need that money when they retire more.
And they're paying the penalties and merely withdraw these -- not the only argument for it and this is I just wanna give devil's advocate as I agree with -- Is that well what's the worst thing to be said on borrowing from myself and -- myself back.
What you can't pay yourself back the thing that you take -- out you can't put it back him in a tax deferred way and keep doing that.
The real problem is it turns up later in life it's starting to happen given it's a -- so let's say they -- alone gives us a loan and that's fine maybe if you can but it's ideal regardless.
But it's not ideal regardless of what it does is it defeats really the system which as you wanna have money -- pounding.
-- -- just like a pension you can't touch attention.
This money.
Was conceived of as not to be -- -- what's going to be the biggest emergencies -- -- for emergency what the biggest thing out of this is people are gonna have to work longer.
And do when they work longer that they're gonna crowd out jobs for the senior -- both ways and have a whole body of people millions can't afford to retire.
Hang on their jobs and you're gonna be.
Leaving out jobs for a lot of young people sorts of very bad combination and.
Allegedly part of it as a reflection on on just a lack of faith in the markets that -- -- markets were doubling tripling and it was like that.
I -- -- the go go ninety's or whatever on people would be less inclined to tap this money because it's growing like a fire.
I think it's absolutely right and people got used to it in the seventies and the eighties and even the early ninety's -- to compound fairly regularly.
What they found now it's much harder to make money.
It's much harder to keep money.
And I go back again and say we now have a nation pension fund managers -- 175 minute and Asian spenders both in the public sector and privately and a nation of spenders how do we get that they're good at spending the better -- a great inspiration the -- -- -- money.
The answer is you've got our first education education education but the rest of what you gotta do what you gotta make it harder for people -- -- the money out yes you may need it but the reality is.
You wouldn't have had -- -- except for this program it's gotta be there when -- 65.
For 20% of Americans it's not going to be -- time bomb.
Real quickly surprised the markets are doing as well as they are in the faces.
Clips that we barely get by a debt ceilings that we're.
Facing.
On and yeah I'm a great believer in the market when -- got to say the market isn't more confident what's gonna happen next few weeks and I am yeah this is a real problem.
This fiscal cliff we did -- once before.
First it.
Terms of business received his first.
Then it discourages Americans now what's happened is its impact in the world we look foolish you know and we look like we don't.
Understand the core issue that we have which is the innate optimism that this country and the ability of this country to keep its word.
That's the harder.
Through -- -- -- thank you -- -- in the meantime.
