![]() ![]() Why are Americans withdrawing their retirement funds? In fact, financial well-being and retirement plan participation actually increased during the pandemic due to government assistance and decreased spending. Most people cashed out due to “friction” in the 401(k) rollover procedure and a lack of education.īut during the pandemic, when many Americans lost their jobs, the CARES Act temporarily waived penalties for leakage up to $100,000 - but the expected wave of withdrawals never came. The three main sources of leakage are: defaults on loans from retirement accounts hardship and non-hardship withdrawals during active employment and cash distribution upon job termination.īefore the COVID-19 pandemic, only about a third of 401(k) leakage was due to emergencies, according to Retirement ClearingHouse. ![]()
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