Using Retirement Funds To Pay For Unemployment Health Insurance Costs–Some Options Allow Help From Distributions

Over the past weeks we have seen ups and downs in the number of new jobless claims but unemployment has remained over 9% as well, with some consumers seeing the timeframe they have been unemployed extend for months without any opportunities for a new job arising. This has obviously caused a great deal problems when it comes to health insurance costs or even paying for certain types of medical bills, yet there have also been some unemployed individuals using retirement funds to help meet these costs for the present time. However, there are arguments that this may not be in the best interest of certain investors as depleting one’s retirement funds could have adverse effects for their financial future, particularly if these men and women are near the age of retirement or may have not properly saved to a point where their retirement fund will not be greatly damaged by using it in this way.

Ultimately, the decision to use retirement funds will fall onto the shoulders of an investor, but for those who have been unemployed for the long term, sometimes unemployment benefits insurance is not enough to meet all of their costs and when health insurance or medical bills are a problem this has led some to look into ways that will help them meet these costs even on a limited budget. Yet, there are certain opportunities that have been used by consumers when it comes to accessing funds from certain types of retirement accounts, and this may occur without having to pay penalties.

While consumers have had to make sure that their particular retirement account will allow for this opportunity, and there are certain requirements that must be met along with using retirement funds to pay for health insurance or medical costs, there are some financial advisers who have stressed looking into alternatives as many feel retirement funds should not be used in this capacity. Some unemployed individuals may qualify for opportunities to get healthcare coverage through a COBRA health insurance plan, but there are others who may opt for short-term health insurance that can come at an affordable monthly cost and, despite coming with a higher deductible in some cases, may offer the security that a consumer needs while unemployed.

It’s understandable that there are some unemployed workers who often worry about how they will pay for expenses like medical costs were they to arise and this leads them to look for ways to meet health insurance costs or continue paying for health insurance they may have from a personal plan but again arguments do fall on both sides of this subject when it comes to using these funds from a retirement account. Since long-term unemployment is still a major factor here in October, it stands to reason that consumers are more willing to use funds from their retirement now in the hopes that they can make up for this loss in the future when a job becomes available, but this is where some opponents of using retirement funds say consumers must look into alternatives as well before turning to one’s retirement savings.