NEW YORK (TheStreet) -- Average bank savings accounts are up since the Great Recession, but not enough to keep Americans from struggling to make ends meet.
"Consumers are currently saving about 4.5% of their after-tax incomes, in line with the average of the past decade," says Michael Gregory, director of U.S. economics at BMO Capital Markets. "While this is below the more than 6% savings rate in the wake of the recession -- as households worked hard to repair their balance sheets -- it remains well above the lows of around 2.5% that we experienced during the housing bubble period."
While Americans struggle to creep back up to that pre-recession 6% savings level, the job will be that much more difficult if consumers continue to tap into a bad financial habit: dipping into retirement savings for everyday needs.
TIAA-CREF says that 29% of Americans have taken out a loan from their retirement plans, and 44% of that figure say they regret it. Women are more likely than men to take from their retirement savings, by a measure of 52% to 41%.
Retirement savers have many reasons for breaking into savings, with "paying off debt" the No. 1 reason, followed by paying for emergency expenditures.
Whatever the reason, it's a direct threat to retirees' financial health. By using retirement plans to pay current financial obligations, Americans erode retirement plans and risk having to pay a 10% levy on the loan when they take cash out of a 401(k) or individual retirement account.