Call it the Great Cash Out: Almost half of job switchers are making the mistake of cashing out their retirement savings when they go

Wed, 04/05/2023 - 06:30

A couple calculating their retirement expenses. — Under most circumstances, the IRS imposes a 10% penalty on those under the age of 59.5 who choose to cash out their retirement savings.
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Americans are rushing to cash out their 401(k)s, and it's not just about being strapped for money.
It's especially true for those who are changing jobs.
Cashing out when you leave a job can mean you miss out on major long-term savings, experts say.

Americans have been cashing out their retirement savings at an "alarming" rate.

That's according to Tom Leslie, the communications manager at the University of British Columbia Sauder School of Business, in reference to a new study by Yanwen Wang, a professor at the school.