A Hewitt Associates study shows that 46 percent of workers with 401(k) plans who lost or switched jobs cashed the plans in, a trend that could lead to serious problems when younger generations of people working today reach retirement.
a 25-year-old cashing out $5,000 today may be sacrificing $75,000 at retirement (assuming a 7 percent return until age 65).
Hewitt study of 170,000 401(k) participants who lost or changed jobs in 2008 showed that those with larger sums in their plans tended not to cash out as much. Also, younger workers were more likely to cash out than older workers.
Six out of 10 employees in their 20s took the money, compared with one-third of those in their 50s, according to the study.
Click on the following for more details: Laid-off workers tapping 401(k) funds to survive :: CHICAGO SUN-TIMES :: Metro & Tri-State
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