Employees cashing out 401(k)s risk a ‘danger zone’

The “danger zone” for employees fully cashing out of their retirement savings plans is 30-39 years old, according to a recent analysis based on more than 20 million Fidelity 401(k) participants.

The overall average age of Fidelity’s 401(k) participants is 44.6 years, and the average tenure on Fidelity’s platform is 8.5 years, the study showed. In addition, the average full payout (or “cash out”) was just $11,000 in 2022, but there were almost 1.1 million workers who took a full payout when they left their jobs.

The danger zone, according to the study, appears to be among participants who were 30-39 years old. Apart from those who had less than one year of tenure, the highest number of full payouts (nearly 70,000) occurred in this age range for workers who had 5-10 years of tenure.

Only 24% of pre-retirees think they have enough saved

How much is enough? Nearly one-quarter of working Americans between the ages of 60 and 67 believe they have enough money saved to support themselves after they stop working, according to Schroders.

Ready, set, CHAAARGE!

96% of Americans said credit card debt is their biggest financial concern.

Source: CFP Board

Working Americans at or over the age of 45 believe it will take $1.1 million in savings to retire comfortably; however, the majority of respondents (59%) expect to have savings of less than $500,000. Only 24% of respondents ages 60 to 67 said they had enough money saved, and 53% of older workers said they are concerned that financial stress will have negative impacts on their overall health.

Millennials are even more concerned than the generation ahead of them about their retirement readiness. Most millennials believe that the savings amount required for a comfortable retirement is slightly higher than older respondents said ($1.3 million vs. $1.1 million). However, only 29% of millennials said they believe they will reach $1 million in retirement savings. Millennials are also more concerned than seniors (64% vs. 53%) about financial issues impacting their health and quality of life.

Clear fees are No. 1

Americans cite “clear and understandable fees” as the No. 1 thing they want from financial service firms, with a higher importance placed on pricing considerations than at any time since 2010, according to a Hearts and Wallets survey.

The pricing of financial service firms continues to be murky for many consumers, the survey said. In 36% of saving and investing relationships with their financial service firms, customers do

65 percent against lifting retirement age for Americans in their 20s

A majority of Americans are opposed to raising the retirement age for younger Americans to shore up solvency for Social Security, new polling finds.

A new poll conducted by left-leaning firm Data for Progress, first reported by

Financial services MOST WANTED:

1. “Fees are clear and understandable.” (60%)

2. “Explains things in understandable terms.” (56%)

3. “Is unbiased, puts my interests first.” (54%)

4. “Provides clear, useful statements.” (53%)

5. “Has made me money.” (52%)

Source: Hearts and Wallets not know how they pay. Twenty percent of relationships are reported as free.

Semafor, found that 65% of Americans surveyed were against raising the retirement age for Americans currently in their 20s.

By contrast, the poll showed bipartisan support for upping taxes on the wealthy to extend solvency for Social Security, as proposed in the Social Security Expansion Act, which was introduced by Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), among others, earlier this year.

“The bill would also increase benefits for all recipients by $2,400 per year. This would be paid for by increasing taxes on wealthy Americans,” respondents were told.

The polling comes as the matter of solvency of Social Security has drawn more attention on Capitol Hill over the past few months.

“Free is clear on the surface and helpful for trial but can leave customers wondering how your firm earns money,” Laura Varas, CEO and founder of Hearts and Wallets, said. “Only 1 in 4 (27% of) customers understand ‘very well’ what their providers do to earn money, with little improvement over time.”