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View More Press Releases by Harris Interactive for the Wall Street Journal

Press release:

A New WSJ.com/Harris Interactive Study Finds One Quarter of U.S. Adults Prematurely Withdraws Funds from Retirement Investment

Issued by: Harris Interactive for the Wall Street Journal

Date: Apr. 24, 2008

Almost half cannot pay back the funds or have not yet begun to do so

ROCHESTER, N.Y., April 24, 2008 --  A new Wall Street Journal Online/Harris Interactive Personal Finance Poll finds that about one-quarter of adults who are actively planning for their retirement have prematurely withdrawn from their retirement investment products. The most common reasons for premature withdrawals from retirement investment products include a family member losing a job and the cost of a down payment on a home. Financial pressures that motivate premature withdrawals seem to begin at age 35, when nearly one-third of respondents report doing so. Respondents under the age of 35 are more likely to withdraw funds for mortgage payments and to pay for an event than older respondents.

These are just some of the results of an online survey of 2,897 U.S. adults ages 18 and over conducted by Harris InteractiveŽbetween March 6 and 10, 2008 for The Wall Street Journal Online.

Wealthier respondents with income of at least $50K are less likely to have prematurely withdrawn funds from their retirement investment products (70% of those who are actively planning for retirement have not done so). Those in the lowest income tier, under $35K, are more likely to be affected by a death in the family and require premature withdrawals- however only 35% of this segment is actually planning for retirement. Adults employed full time feel the least pressure to withdraw funds prematurely from their retirement investment products, with nearly 70 percent of those actively planning for retirement never having done so.

The part time employed experience more pressure in housing related expenses and are more likely to prematurely withdraw funds for a down payment on a home and for mortgage payments.

Nearly one-third of adults who have prematurely withdrawn funds from their retirement products cannot pay them back, and 45 percent either cannot pay back the funds or have not begun to do so. Those ages 45-54 are more likely to be unable to pay back their premature withdrawals. The youngest adults, 18-34, seem to be more financial responsible or less financially burdened, and are more likely to be currently making payments. Among the oldest respondents who have prematurely withdrawn funds, one-quarter of respondents are still actively contributing to their retirement investment products.

Even among the highest income earners, over $75K, more than one-quarter of respondents cannot pay back their premature withdrawals. The lowest income earners are more likely to have not begun to pay back their premature withdrawals.

Retirement Planning Awareness Increases With Age and Varies

According to Peggy Lebenson, Senior Vice President for Financial Services at Harris Interactive, "On average, those who are planning for retirement began to do so at the age of 32. Each subsequent generation seems to be increasingly aware of its need to begin retirement planning as early as possible. Single respondents continue to begin retirement planning at an earlier age, presumably because they have the resources to do so."

Among the 90 percent of U.S. adults who plan on retiring, most continue to contribute to their 401(k), have an IRA or invest in the market. Nearly one-quarter have not yet started planning for their retirement and about 10 percent say they do not plan to retire at all. A majority of respondents over the age of 55 have retired but nearly 40 percent are still planning for their retirement.

Information and knowledge are crucial to retirement planning. Those with more education are more like to be engaged in every retirement planning activity surveyed (except for "Other") - with each better educated segment more prepared than the previous. College graduates make up the only segment where a majority is actively planning for retirement (65%). Over one-third of those with a High School diploma or less, and about one-quarter with some college education, have not begun to plan for retirement.

Those with the highest incomes ($75K+) are most active in their retirement planning. Nearly 40 percent of those with incomes under $35K have not begun to plan.

The proportion of the population who expect to rely on Social Security as a primary source of income in retirement has fallen compared to 2007- although a majority expect to rely on it. This decline comes mainly from respondents ages 35-44 and those over 55. Half of U.S. adults expect to rely on their 401(k) and one-third see their IRA as a primary source of income in retirement. However, nearly one-third of respondents also continue to view a pension plan as a primary source of income in retirement. Reliance on Social Security declines as respondents get younger, as reliance on 401(k)s generally increases.

Respondents who are more educated are more sophisticated in their retirement planning- each segment with more education is more likely to cite a 401(k) and an IRA as a primary source of income than the previous. Despite the decline in offering traditional pensions, over one-third of respondents with some graduate school experience expect to rely on a pension. This could be due to the type of employment that requires a graduate degree.

Interestingly, expected reliance on Social Security has only fallen among the least and most affluent compared to 2007. A majority of respondents across all income levels continue to see Social Security as a primary source of income in retirement. Respondents among the lower middle class, earning $35-$49.9K are more likely to rely on Social Security compared to the total. The wealthiest respondents continue to be the most sophisticated and are most likely to be invested in 401(k)s and IRAs.


This survey was conducted online within the United States from March 6 to 10, 2008 among 2,897 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents' propensity to be online. Bases for certain questions in the study were reduced due to a programming issue. Because the sample is based on those who agreed to be invited to participate in the Harris Interactive online research panel, no estimates of theoretical sampling error can be calculated. A full methodology and data tables will be made available online.

About The Wall Street Journal Online

The Wall Street Journal Online at WSJ.com, published by Dow Jones & Company, is the largest paid subscription news site on the Web with one million subscribers worldwide. Launched in 1996, WSJ.com attracts a rapidly growing audience of industry leaders and influentials. The award-winning site provides in-depth business news and financial information 24 hours a day, including breaking business and technology news and analysis from around the world. It draws on the Dow Jones network of nearly 1,900 business and financial news staff - the largest network of business and financial journalists in the world.

About Harris Interactive

Harris Interactiveis a global leader in custom market research. With a long and rich history in multimodal research, powered by our science and technology, we assist clients in achieving business results. Harris Interactive serves clients globally through our North American, European and Asian offices and a network of independent market research firms. For more information, please visit www.harrisinteractive.com.

View More Press Releases by Harris Interactive for the Wall Street Journal

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