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Member, Beacon International Group, Ltd.
When switching or leaving jobs, many employees are cashing out their 401(k) savings, despite warnings from financial professionals against incurring the accompanying 10% penalty, according to research recently published in Marketing Science and Harvard Business Journal, reports Plansponsor. After evaluating more than 162,000 terminated employees covered by 28 different retirement plans, researchers found that 41% of employees cashed out their 401(k) savings at job separation, with most draining their entire accounts.