According to a Bankrate.com report, 30 million Americans withdrew funds from their retirement funds for emergency reasons last year. Those high numbers point to a need for financial planning.
And while many mortgage brokers are increasingly focusing on more than just originating mortgages, one industry player argues they should be wary of providing financial advice, themselves.
“As far as taking on more financial advice, I think that would be a bad idea,” Chris Cox, vice president of mortgages for First Savings Mortgage Corporation, told Mortgage Professional America. “It’s better to leave that to the experts.
Still there is an opportunity for mortgage originators here. Many rely on referral sources to help grow their business, and these recent stats could provide a great opportunity for brokers to refer to their financial planner partners – and thus deepen those relationships.
It’s a great chance to reach out to those referral sources, say Cox said. “Most of us work with them already,” Cox said.
The report, which was released Wednesday, also found that 21 million Americans aren’t saving for retirement.
Those in the most dire financial situation are those in the 50-64 age bracket. Some 26% of those said their financial situations deteriorated over the past year.
Further, 17% of those reaching retirement age had to dip into retirement funds for emergency purposes.
"Using retirement savings to cover an emergency is a permanent setback to retirement planning, with the possibility of taxable distributions, early withdrawal penalties, loss of tax efficiency, and the inability to replace withdrawn funds in future years," said Greg McBride, Bankrate.com's chief financial analyst.
A high number of Americans are dipping into their retirement savings for emergencies, according to a recent study, drawing attention to the increased need for financial planning.