Report: Leakages Cut Retirement Wealth 25 Percent

Feb. 10, 2015, 5:00 AM

Retirement plan leakages reduce aggregate retirement wealth by about 25 percent by age 60, the Center for Retirement Research at Boston College said.

Assuming annual leakage of 1.5 percent of plan assets from in-service withdrawals, cashouts and plan loans, a 60-year-old worker would have $203,000 in accumulated Section 401(k) wealth and $85,000 in accumulated individual retirement account wealth, down from $272,000 and $110,000, respectively, if no money were withdrawn before retirement, the group said in a brief, “The Impact of Leakages on 401(k)/IRA Assets,” released Feb. 3.

The report—which used Vanguard data that represents about 10 percent of plans—also ...

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