A new study released today by the Transamerica Center for Retirement Studies® illuminates how unemployment and underemployment can impact the retirement outlook of displaced American workers.
The study of 668 displaced workers who are either unemployed or underemployed - part of the 12th Annual Transamerica Retirement Survey - found that the majority (67 percent) of these displaced workers are less confident in their ability to achieve a financially secure retirement since the recession began. However, the survey report also identifies steps that can be taken to improve their long-term prospects.
Many displaced workers have tapped their savings (50 percent), used credit cards (32 percent), and taken withdrawals from their retirement accounts (22 percent) to cover expenses. Over one-third (36 percent) of these displaced workers reported having less than $10,000 in total household retirement accounts.
Fate of 401(k) Accounts
The survey’s findings illustrate the impact on the retirement outlook of un/underemployed workers. Just over half 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 indicated they have taken a partial or full withdrawal since becoming unemployed or underemployed.
What can displaced workers do to improve their individual retirement outlook?
While the single greatest opportunity for unemployed and underemployed workers is to regain meaningful full-time employment, the survey report suggests tips that may help to improve their retirement outlook, including: taking on a part-time job; updating job skills; considering obtaining a college degree; avoiding taking withdrawals from qualified savings accounts; and weighing retirement benefits as part of their total compensation package.
Please read more in the press release.
For the full survey results and for resources about retirement planning, visit www.transamericacenter.org (external link).
