THE ECONOMY IS REALLY IMPROVING: More than 25 percent of Americans raiding 401(k)s to pay bills. “U.S. workers are tapping into nearly a quarter of the $293 billion placed into their retirement savings each year to pay for mortgages, credit cards and other debts, according to a report from financial advisory firm HelloWallet. Those in their 40s are the most frequent raiders, with about one-third using their 401(k)s to pay current bills.”

UPDATE: An amplification on the linked story from reader Kevin Patrick:

The mistake is at the AZ Daily Star (or in the PR that they published for HelloWallet :-) ), not yours, but the excerpt didn’t sound right to me. “Most” Americans don’t have a 401(k), so I looked for the study online. Here’s what the study actually says in the executive summary:

“Over 25 percent of households that use a 401(k) or similar DC plan have used all or some of their savings for non-retirement needs, amounting to over $70 billion in annual withdrawals”

The study says that 40% of American households have access to a 401(k) or similar DC plan, so if 25% of those have used it for non-retirement needs, this is only 10% of American households who have done so. The study itself actually notes, “Yet, as large as those numbers are, DC plans are a marginal contributor to the actual retirement needs of U.S. workers. In fact, DC balances constitute less than 7 percent of the gross asset value owned by all households near retirement.”

You can find the study here.

Not good news certainly, but not nearly as bad as the headline seems. That’s good PR for you!

I’m not sure that it undercuts the main point, which is that people in their 40s, who should be doing reasonably well, are having to dip into retirement to make ends meet.