"This paper uses a unique panel of consumer financial transactions to examine how aging consumers respond to the option to cash out retirement savings.... We find a large and highly significant increase in bank account balances when an individual turns 55, suggesting that the average consumer in our sample withdraws a large portion of their eligible retirement savings.... We do not find any evidence that the average consumer responds by excessively increasing present consumption at the expense of future financial security. Nevertheless, consumers leave a sizeable portion of their withdrawn savings in low-interest accruing bank accounts for at least a year after withdrawal."

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