The Definitive Guide to 401(k) Cashout Leakage

What is 401(k) Cashout Leakage?

Research Papers:

On Cashout Leakage:

• Cashing Out Retirement Savings at Job Separation (Wang, Zhai & Lynch, 2022)
• Cashing Out: The Systemic Impact of Withdrawing Savings Before Retirement (Savings Preservation Working Group, 2019)
• EBRI Issue Brief #489 (Employee Benefit Research Institute, 2018)
• What do workers do with their retirement savings after they leave their employers? (Alight Solutions, 2019)
• How America Saves (Vanguard, 2021 – directly links to section on plan distributions)
• Estimating Leakage from Retirement Savings Accounts (JCX-20-21) (Joint Committee on Taxation, 2021)
• How Employees Handle Their Retirement Savings During Work Transitions (Pew Charitable Trusts, 2021)
• Plan leakage: A study on the psychology behind leakage of retirement plan assets (DCIIA, 2016)
• Defaulting In and Cashing Out? The Impact of Retirement Plan Design on the Savings Accumulation of Separating Employees (RAND Corporation, 2015)

On the Efficacy of Retirement Savings Portability in Reducing Cashout Leakage

• Assessing the Ongoing Impact of a Program of Retirement Savings Portability (Retirement Clearinghouse, 2021)
• Actionable Insights for Your Mobile Workforce (Boston Research Technologies, 2015)
• Eliminating Friction & Leakage in America’s Defined Contribution System (Boston Research Technologies, 2013)

Tools:

• Online Cashout Calculator
• The National Retirement Savings Cash Out Clock
• The Auto Portability Plan Calculator

Articles:

• Increased Cashouts at Job Separation Highlight Need for Auto-Portability
• Fidelity analysis finds a ‘danger zone’ for employees cashing out 401(k)s
• Cashing out 401(k) accounts: the new retirement crisis
• 'Something has to be done'
• Highway Through the 'Danger Zone'
• Why 401(k) Cashout Leakage is a Crisis
• 401(k) Cashout Confusion: Who’s Doing It and Why?
• How Big is the 401(k) Cashout Leakage Problem (Really)?
• 3 Promising Policies to Reduce Cashout Leakage
• How to Prevent Retirement Plan Leakage
• The institutionalization of portability is key to reducing cash-out leakage
• A Mistake with Lingering Regret: Cashing Out Your 401(k)
• 401(k) Retirement Savings: More ‘Gone’ Than ‘Forgotten’
• 401(k) Truth Bomb: Missing Participants are Bad, 401(k) Cashouts are Worse

Video:

• The Fundamentals of 401(k) Cashout Leakage
• Five Misconceptions About 401(k) Cashout Leakage

RCH Services that Curb Cashout Leakage:

• RCH Managed Portability
  • Assisted Roll-In (for active participants)
  • Assisted Roll-Out (for terminated participants, all balances)
• RCH Automatic Rollover, featuring Auto Portability

To learn more about all of RCH’s portability and participant search services, call (866) 827-9608, email sales@RCH1.com, or visit our RCH Portability Services page.