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Shaky economy drives workers to dip into retirement accounts

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Dive Brief:

  • Thirty-seven percent of workers are turning to their retirement accounts to help cover costs during financial emergencies, debt, household expenses and medical bills, among other bills, according to survey results released Thursday by Transamerica Center for Retirement Studies, a not-for-profit focused on retirement education and a division of Transamerica Institute. 
  • Generation Z was the most likely generational cohort (28%) to dip into their 401(k) or IRA, followed by millennials (24%), Generation X (19%) and baby boomers (12%).
  • “The pandemic and turbulent economy have taken a toll on workers’ employment, finances, and retirement preparations. Without additional support from policymakers and employers, it will be extremely difficult for many workers to recover,” Catherine Collinson, CEO and president of Transamerica Institute and Transamerica Center for Retirement Studies, said in the release.

Dive Insight:

The Transamerica retirement survey underscores rising fear and uncertainty about retirement among workers. 

The confidence workers and retirees have that they’ll have enough money saved for retirement declined the most it has since 2008 during the Great Recession, an April report by the not-for-profit Employee Benefit Research Institute and research firm Greenwald Research found. Amid concerns about having little or no savings, inflation and debt, 64% of workers said they would be able to live comfortably in retirement, a drop from 73% a year before. On the retiree side, 73% felt confident, down from 77% in 2022, the survey found. 

And workers don’t expect to see that tide turn. 

Forty-one percent think future generations will struggle more than those currently in retirement, the Transamerica report found.

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