If youre like many people, your retirement savings have not been growing consistently over the years. Were not referring to the wild fluctuations in the stock market, but rather the fluctuations in our short-term needs. Every once in a while, it just seems like a good idea to yank ALL those retirement savings out and pay for something.

You might need to pay for a down payment. You might need to pay off some credit card debt thats nagging at you. You might want to bugger off to Europe as Rick did some years ago. You know its not a good idea financially, but you do it anyway. Retirement savings are not designed to bail us out when we need this kind of short-term cash infusion but if its there

As financial advisors, we have our ideals. Ideally, you should put retirement funds away and leave it there. Ideally you should never touch it at all, even when you retire! Why? Because it is the earnings from the nest egg that you should be using, never the principal. As we heard one person suggest recently, your principal is like your goose, and you never kill the goose, because then youre eliminating all those future golden eggs (interest/earnings) it will lay.

As financial advisors, one way we try to prevent people from yanking out their retirement savings is by ensuring there are other short-term funds available for emergencies. These are meant to act as a buffer zone against the yankers. It helps, but it doesnt always work.

One problem is that a distant retirement will never be more urgent than the current cash demands you have. Its impossible. How can long-term demands be more urgent than a current crisis? So what stops you from yanking out those retirement funds? Their convictions? Simple arithmetic? A more viable alternative?

When a client is bent on yanking out their retirement savings to pay off, for example, some credit card debt, telling them how much theyre going to lose in retirement income in 25 years time doesnt seem to work. Even telling them how much the tax bill is going to be next year can pale in comparison to the relief the person is seeking from the anxiety over their current debt crisis.

So, the question is how can we provide relief and still keep the retirement funds intact? Look at a debt consolidation loan? Review the persons cash flow and create a debt repayment program? Maybe this will work for a minority of people. In the real world, when people are looking for relief, however, they are looking for relief NOW!!! The easiest way is to yank to retirement funds and be done with it.

So, in the moment, when you are in a cash crunch and seemingly have no other place to go, you will yank your retirement savings. Unless you have anticipated the problem and pre-decided that under no circumstances will you access your retirement savings. In this way, you will do a pre-emptive strike on bad financial moves. Further, you will be cognizant of putting yourself into situations where you might risk those long term savings.

The alternative is to invest long-term, make progress, encounter a short-term cash crunch, yank out your retirement funds, survive the problem, invest long-term again, make progress, encounter yet another short-term cash crunch, yank out your retirement funds to get relief

If youre locked into an investment cycle like this, your retirement savings have not been growing consistently over the years, and its not just the market.