More than one-quarter of US households that use 401(k) retirement-savings accounts withdraw money from these funds for purposes other than retirement at some point: About $60bn of the $294bn in these accounts has been pulled out for such uses as paying off debts or making ends meet when people are between jobs, even though withdrawals trigger penalties. People often cash out of their retirement accounts when they leave jobs, rather than rolling them over into new 401(k)s.

(Source: The New York Times)

Published in Dawn, Economic & Business, December 8th , 2014