Preretirement Withdraws Might Explain Retirement Savings Gap

Preretirement Withdraws Might Explain Retirement Savings Gap

A new study published by the Collaborative for Equitable Retirement Savings finds that Black and Hispanic workers withdraw a larger portion of their account balances before retirement.

The study is based on a thorough analysis of anonymized 2022 data from nine 401(k) plan sponsors across 180,000 active plan participants.

Go deeper: At ages 55-59, both Black men and Black women have a 49% probability of having an outstanding loan against their retirement accounts.

  • That compares with 22% of White men and women and 39 percent of Hispanic men and 32% of Hispanic women.
  • The report’s simulation results indicate that eliminating preretirement withdrawals would mitigate race and gender disparities, particularly for early- and mid-career 401(k) participants.

Published by

Darryl Hicks

Darryl Hicks is Vice President of Communications for the National Reverse Mortgage Lenders Association. In this capacity, Hicks writes for NRMLA's publications, manages the association's web sites and social media accounts, assists committees and the Board of Directors, and manages the Certified Reverse Mortgage Professional designation. Prior to joining NRMLA in 1999, Hicks spent three years in the Washington, D.C. bureau for National Mortgage News.