WASHINGTON, Nov. 17 (UPI) -- The average participation rate in 401(k) plans has dropped nearly 4 percentage point to 73 percent, according to a survey by Plansponsor.com.
"That's a disquieting trend, because those workers don't usually have anything else to lean on," said Nevin Adams, editor of Plansponsor.com.
Among workers who took a distribution from a 401(k) plan last year, 42 percent cashed out when they changed jobs, according to Hewitt Associates. The rest rolled the money into an IRA or moved it to a 401(k) plan at a new employer.
Many of the employees are abandoning their 401(k) plans and raiding retirement savings when they switch jobs and have access to them, despite the tax penalties, USA Today reported.
"People say, 'I've only got so much discretionary income, and so retirement is something I'll put off until another day,'" Adams said.
The biggest drop in retirement savings was among Americans ages 45 to 59, with just 41 percent of the group now saving for retirement, down 17 points from 2001, according to a report by marketing consultants RoperASW.
