Federal workers struggling through shutdown tap retirement funds

Data show 34% jump in hardship withdrawals in the 2 1/2 weeks after Christmas, when compared to last year

Jan 16, 2019 @ 4:51 pm

By Bloomberg News

Growing numbers of federal workers have been tapping their retirement funds in a sign of how the government shutdown is squeezing day-to-day finances.

Federal Retirement Thrift Investment Board data show a 34% jump in the number of hardship withdrawals in the 2 1/2 weeks after Christmas when compared to the same period last year. The data goes through Jan. 14, the first weekday after many federal employees missed paychecks.

(More:Advisers help federal employees financially manage the shutdown)

The outflows mostly come from investments run by BlackRock Inc., the sole manager for four of the Thrift Savings Plan's five individual funds. A spokeswoman for the New York-based company declined to comment.

Thrift Savings Plan spokeswoman Kim Weaver said she couldn't compare the withdrawal rate now to those during previous U.S. government closures, though she did say in an email that there was a "surge in hardship withdrawals in October 2013."

During that shutdown, more than 14,000 plan participants took hardship withdrawals, and that year ended with a decade-high number of loans and such withdrawals.

(More:SEC shutdown opens the door for fraud)

"The longer the shutdown lasts, the more withdrawals we'd expect to see," Weaver said.

TSP's Weaver noted that during the market's tumultuous fourth quarter, many participants shifted money out of the funds managed by BlackRock to the one that invests in short-term Treasury bills.

The federal plan had about 5.5 million participants as of Dec. 31.

0
Comments

What do you think?

View comments

Most watched

Events

Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Events

Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Latest news & opinion

This strategy can double your estate-tax exemption

'Portability' allows a surviving spouse to tack the decedent's exemption on to his or her own. Despite the higher threshold for paying estate taxes in the 2017 tax law, experts recommend filing for the benefit.

Couple in Morgan Stanley advisory account wins $519,000 arb case over unsuitable investments

Plaintiff's lawyer says junk bonds, futures contracts and derivatives were inappropriate for his clients.

The growth of factor-based investing

Advisers are making decisions about clients' portfolios by using the same characteristics that govern factor-based ETFs.

Finra makes its list to target hundreds of rogue individuals

The regulator sees patterns in the behavior and disclosures of high-risk brokers.

LTC insurer offering co-pays to blunt soaring premium increases

John Hancock policyholders would get a discount on their premium in return for agreeing to pay a bigger portion of their claims in the future.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print