Natural Disasters Damage Retirement Accounts, Too

Natural disasters are known to damage communities and properties. Less understood, however, is the harm they can cause to participant retirement accounts.

When a participant’s home or property is destroyed, dipping into his defined contribution (DC) plan account may be one of the first actions he takes. This leads to early distribution taxes and penalties and cuts savings accumulated. And, because participants will take a period of interrupted employment to work on their homes and communities, this makes a dent into their retirement account as well since retirement contributions are disturbed too, says Steve Friedman, a shareholder who advises employers on employee benefits law at Littler Mendelson.” Continue reading.

Source: PLANSPONSOR