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By Herb Weisbaum ConsumerMan
msnbc.com contributor

Americans are feeling less secure about their finances and many struggle to pay the monthly bills. A study released by Bankrate.com this week shows nearly one in five Americans (19 percent) admit raiding their retirement accounts during the past 12 months to cover expenses.

“It’s alarming,” says Greg McBride, Bankrate.com’s senior financial analyst.

And it’s not just people who are out of work, which may be the logical assumption. Most of those people have full-time jobs.

Making early withdrawals from retirement accounts can have significant consequences, including steep bank fees and tax penalties. You also lose the benefit of compound interest – making interest on your interest, which really makes that retirement account grow. And, of course, taking the money sooner rather than later deals a permanent setback to your retirement planning.

“Not only are you depleting that nest egg, but you’re lucky if you get 70 cents on the dollar after you factor in the taxes and the penalties,” McBride explains.

“I beg people to leave their retirement accounts alone,” says Jane Bryant Quinn, financial expert and author of “Making the Most of Your Money Now.”

“When you take money out of your retirement account you are using up your future. And you can’t put it back,” says Quinn. “Anything you spend today you are not going to have to spend tomorrow.”

Quinn’s advice: Consider your current situation and make some tough decisions. Can you really afford to live in your house? Can you change your lifestyle to make ends meet? Do you need to pull the plug and declare bankruptcy in order to get a fresh start?

“I see people who are already in a position where they are underwater,” Quinn says. “And they’re trying to pay their mortgage even though they know they’re likely to lose their house. My feeling is if you know none of this is going to work, you shouldn’t keep paying your mortgage. You shouldn’t keep on paying those bills.”

Quinn says if you’ve run out of options, you need to preserve the money in your retirement account, face reality and consider bankruptcy. With a bankruptcy, she notes, your 401-(k) and IRAs are protected.

“If you can have a fresh start and a retirement account, that’s a pretty good position to be in for someone who has been brutally handled in this terrible economy and is trying to look for some kind of silver lining,” Quinn says.

My friend Larry is typical of the struggling American worker. Larry (who requested that we do not use his full name) lost a good-paying job more than a year ago. Now at 54 he can only find part-time work. Larry is a talented guy, but the opportunities just aren’t there. With his income cut in half, bills adding up and no full-time job prospects on the horizon, Larry decided to raid his retirement account.

“It was either that or borrow even more money,” he says. “I’m already in hock up to my ears, so this was my last resort.”

Larry is spending his future to get through today. At this point, he will have nothing to retire on except Social Security and a small pension.

“It’s not where I had planned to be at this point in my life. But through no fault of my own, I find myself in this situation like so many other people.”

Unless some miracle comes along, Larry tells me he plans to work well into his 70s.

Other findings from the survey
Many Americans remain less than optimistic about their economic present and future.

* One in three adults (33 percent) said their overall financial situation is worse than 12 months ago.

* Only 18 percent said they are comfortable with their level of debt. That’s down from 24 percent in March and 27 percent in January.

Why the gloomy outlook? Bankrate’s Greg McBride blames skyrocketing gasoline and food prices at a time when wages are stagnant.

“You could talk all day long about the areas where we’re seeing improvement in the overall economy,” McBride says. “You can look at all the statistics you want about job growth and higher household net worth with the rebounding stock market. This just goes to show how many Americans out there aren’t feeling it. They’re not feeling it in job security and they’re not seeing it in their savings and net worth.”

The bottom line
Even if you’re not facing a hardship at this time, you never know when the situation will change. That’s why it’s so important to do whatever you can to pay down your debt and build up an emergency savings fund. Ask yourself, am I prepared to weather the storm – maybe for 6 months or longer – should I lose my job?

Want to keep up with the latest on consumer news, follow the ConsumerMan on Facebook .

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