Transamerica Center for Retirement Studies said the survey of 668 displaced workers found many have tapped their savings (50%), used credit cards (32%), and taken withdrawals from their retirement accounts (22%) to cover expenses. Over one-third (36%) of these displaced workers reported having less than $10,000 in total household retirement accounts.
Just over half (53%) of those who are unemployed or underemployed were offered a 401(k) or similar plan by their most recent employer; and, of those who participated in the plan, over one-third (35%) indicated they have taken a partial or full withdrawal since becoming unemployed or underemployed.
Unemployed workers (42%) are more likely to have taken a withdrawal than underemployed workers (28%). As length of un/underemployment extends to beyond one year so does the likelihood of taking a withdrawal from a 401(k) or similar retirement plan account: nearly four in ten (39%) who have been un/underemployed for over one year reported taking a withdrawal compared to one-fifth (20%) of those who have been un/underemployed for less than one year.
The survey report offers insights about members of the workforce who are most likely to be unemployed or underemployed, including: over 40 years old (65%); without a college degree (63%); male (54%); and single (54%). Additionally, workers who have been un/underemployed for less than a year are more likely to be unemployed but looking for work (59%), while after one year, those who have been unemployed become more likely to stop looking for work (7%), to retire (14%), or to find full-time underemployment (39%).The survey report offers suggestions for improving displaced workers’ long-term prospects.