The "Great" officially ended in June 2009, but you wouldn't know it, judging by the millions still seeking work after months of effort and countless rejected applications.
According to government records, theofficially ended in June 2009, the last point that the nation's (measured in gross domestic product) contracted and the first point at which the U.S. began to grow again.
What is the solution if you are one of those 12.8 million people? There is one, but it may not be everyone's first choice.
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Most people want a job, but not just any job. For many Americans, their job is their identity, their standard of living and a symbol of status that shows peers and family that they've made it in the world. It's difficult to swallow that pride and "settle" for a job that pays a fraction of what you used to earn.
But settling may actually be the best. According to a recent survey by the Transamerica Center for Retirement Studies, a growing amount of evidence supports the idea that quickly getting any job, a "bills-paying job" as I them -- even one that's below your skill set and pay grade -- can be much more beneficial to your finances, your well being and even your future employment opportunities than taking your time in finding a high-powered or otherwise coveted job.
The survey asked 621 displaced workers who were either unemployed or underemployed (meaning those who took jobs requiring lesser skills or pay to earn income) various financial and attitude-related questions to gauge their respective retirement outlooks. The study also compared how the outlooks differed among those who had been unemployed for less than a year versus those who had been unemployed for more than a year.
Based on Transamerica's survey data, here are five compelling reasons why you should accept any job now, rather than wait (potentially months) for a higher-powered job:.
1. You're much less likely to deplete your hard-earned savings to make ends meet.
Losing a job or having to settle for a lower-paying job in an especially tough economy has forced many people to make unprecedented financial sacrifices. But according to Transamerica's survey, underemployed workers were much more likely to hold onto their hard-earned dollars than unemployed workers. In fact, the underemployed were about 24% less likely to have to tap into savings than the unemployed.
2. You're more likely to haveand less likely to be trapped by medical bills.
When it comes to health insurance, settling for the bills-paying job can make a big difference as well. Underemployed workers in the survey were 26% more likely to have health insurance coverage than unemployed workers.
According to the survey, a surprisingly high 44% of all underemployed respondents had health insurance benefits offered by their employer -- although some held part-time jobs. By comparison, nearly half of the unemployed respondents who had health insurance said they depended on their spouses' employer (which can be risky in a shaky economy) or individual policies (which can be very expensive) for their coverage.
Health insurance coverage can sometimes bankruptcy. According to a Harvard University study, an astounding 62% of all personal bankruptcies filed in the U.S. in 2007 were caused by medical problems. The Harvard study also noted that high medical bills caused 92% of the reported medical bankruptcies, with out-of-pocket costs averaging $17,943 per medically bankrupted family.the difference between financial stability and
3. You're much less likely to sabotage a comfortable retirement.
The tough economy also has forced many un/underemployed workers to raid their 401(k) plans prematurely, but respondents who held any job were much less likely to have to do so than those with no job. In fact, Transamerica's survey found that 63% of unemployed people took an early withdrawal from a 401(k) or similar retirement plan to make ends meet. That's almost twice as many people as in the underemployed group.
While it may sound obvious to say it’s not ideal to borrow from your 401(k) in a short-term unemployment pinch, early withdrawals can be more detrimental to your long-term retirement plan than you may think. Let's say you're unemployed and you need $20,000 from your 401(k) to make ends meet for the year. Not only will you have to pay taxes on the withdrawn funds, you also must pay the IRS' 10% early withdrawal penalty. If you pay 15% in taxes and 10% toward the early withdrawal penalty, you're handing the IRS $5,000 that you'll never get back. And you’ll be left with only $15,000 to use.
If instead you found a simple job that paid the bills and prevented you from taking an early 401(k) withdrawal, you could leave that $20,000 in your 401(k). If left to grow at a 6% rate of a return, that amount would triple to $66,204 in just 20 years -- think how many meals that would pay for in retirement!
4. The longer you're unemployed, the more discouraged you will be to progress and grow.
Transamerica's survey also showed that both long-term underemployment and unemployment can take a devastating toll on a person's well being and attitude toward self-growth. The survey compared two groups to confirm this: people who had been un/underemployed for less than a year and those who had been un/underemployed for more than a year.
Of those who were un/underemployed for the shorter period, 14% said they would not make work-related changes (such as switching industries or professions), seek additional education or make money-saving lifestyle changes. By comparison, a disappointing one in four of the second group said they would not seek to progress in these activities.
The longer you're not working, the more likely you’ll feel despair about retirement as well. A troubling 66% of respondents who were un/underemployed for a longer term said they were "not too confident or not at all confident" that they would be able to fully retire in a comfortable lifestyle. That compares to 50% of respondents who had been un/underemployed for less than a year who said the same.
5. You'll be more motivated to find better work, add to your skills and improve your finances.
What's the flipside to the previous point? Underemployed workers were much more proactive than unemployed workers in improving their financial situation, making work-related changes to grow in their long-term career and even taking steps to cut their financial expenses.
A whopping 79% of underemployed workers said they will seek a job in another field or take on a second or third job, while just 50% of unemployed workers said the same. A healthy 42% of underemployed workers said they would pursue college education, go to trade school or learn new career skills, 36% in the unemployed group said the same.
The Investing Answer: There is such a thing as accepting a job too quickly. Before you leap on the first , consider your tolerance of a given job and assess an organization's overall stability.