- Teaching Your Children About Money
The decision parents make about giving their children an allowance can have important ramifications in how their kids view money. The Early Show financial guru Ray Martin tells you how to teach your children well.
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Posted: 3:01 PM Jul 16, 2008
Last Updated: 3:01 PM Jul 16, 2008
Reporter: Associated Press
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NEW YORK (AP) - A new study finds people are using their 401(k) retirement plans to cover financial hardships such as a job loss or medical emergencies. The Center for American Progress says that between 1998 and 2004, 12 percent of families dipped into the funds. The center has also found that the annual borrowing went from 6 billion dollars in 1989 to 31 billion dollars in 2004. The study's author says even though most of the loans are repaid without penalty, pulling those funds out of the retirement accounts lessens the amount a person will have when he or she does retire. Another study by Hewitt Associates finds that four out five workers are not putting enough into their 401(k) accounts. It says employees are saving enough to replace 85 percent of their income in retirement, but when inflation, longer life spans and medical costs are factored in, they'll need to replace 126 percent.
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