One-fourth of Americans Have Dipped into Retirement Savings

April 24, 2008 ( - A new Wall Street Journal Online/Harris Interactive Personal Finance Poll indicates about one-quarter of adults who are actively planning for their retirement have prematurely withdrawn money from their retirement savings.

According to a press release on the survey results, the most common reasons for premature withdrawals from retirement investment products are a family member losing a job and a down payment on a home. Respondents under the age of 35 were more likely to have withdrawn funds for mortgage payments and to pay for an event than older respondents.

Wealthier respondents with income of at least $50,000 were less likely to have prematurely withdrawn funds from their retirement savings (70% of those who are actively planning for retirement have not), the press release said. Likewise, adults employed full-time feel the least pressure to withdraw funds prematurely, with nearly 70% of those actively planning for retirement never having done so.

Nearly one-third of adults who have prematurely withdrawn funds from their retirement products said they cannot pay them back, and 45% said they either cannot pay back the funds or have not begun to do so. Those ages 45-54 are more likely to be unable to pay back their premature withdrawals, and those ages 18-34 were more likely to be currently making payments. Even among the highest income earners, over $75,000, more than one-quarter of respondents said they cannot pay back their premature withdrawals.

Retirement Planning

Among the 90% of U.S. adults who plan on retiring, most contribute to their 401(k), have an IRA, or invest in the market. Nearly one-quarter said they have not yet started planning for their retirement

College graduates make up the only segment where a majority is actively planning for retirement (65%), while over one-third of those with a High School diploma or less, and about one-quarter with some college education, have not begun to plan for retirement.

Those with the highest incomes are most active in their retirement planning, and nearly 40% of those with incomes under $35,000 have not begun to plan.

The survey found the proportion of the population who expect to rely on Social Security as a primary source of income in retirement has fallen compared to 2007- although a majority expect to rely on it. Respondents among the lower middle class, earning $35,000 – $49,900, are more likely to rely on Social Security compared to the total.

Half of respondents said they expect to rely on their 401(k), and one-third see their IRA as a primary source of income in retirement. Nearly one-third of respondents also continue to view a pension plan as a primary source of income in retirement.

The online survey of 2,897 U.S. adults ages 18 and over was conducted by Harris Interactive between March 6 and 10, 2008, for The Wall Street Journal Online.