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Nearly half of American workers have tapped into their retirement early

There’s no exact science to prepare for retirement. Most advisors will suggest you save at least 10% of your pre-tax income, but if all else fails, “something is better than nothing” tends to be the preferred thinking. While there’s no set rule to build your golden nest egg, Bankrate’s latest study found that 52% of Americans say they are behind where they should be in saving for retirement.

Bankrate’s Chief Financial Analyst Greg McBride joined Yahoo Finance’s The Final Round to give insight into ways people can increase their savings.

“If you’re just dabbling in it by saving 3%, 4%, 5%, get to 10% pronto,” McBride says. “Do that today, then work your way up to 15%.”

Mature businesswoman and her male colleagues brainstorming while working on a computer in the office.

Dipping into an already small nest egg

In this same study, 49% of participants said they have tapped into their retirement accounts prior to retiring. That’s “alarmingly high,” says McBride.

“When we asked what are the top reasons for people taking money out: unemployment, medical bills or other unplanned expenses, even debt repayment. I think it just bears repeating, if not stressing, the fact that your retirement account is not your emergency savings account,” says McBride.

Purposes for withdrawing from retirement

The risks of tapping into your retirement funds early are not limited to the initial loss of money, but can also result in additional taxes and fees. Usually, 401ks require you to pay a 10% early withdrawal penalty if you take out money before age 59 1/2.

Ultimately, McBride says that saving takes time.

“Successful saving is all about the habit. I’m a big advocate of ‘start saving early,’ and even if that’s a token amount, but then ramp it up.”

Devin Southard is a writer and producer at Yahoo Finance.

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