Wondering why Americans haven’t accumulated more wealth in 401(k) accounts? Here’s one good reason: nearly half of people who changed or lost jobs last year cashed out of their accounts on the way out the door. A study by Hewitt Associates reveals that 46 percent took cash out of their accounts on their way out the door. That decision incurs taxes and penalties for most–and it means the money is no longer invested and growing.

That’s not the only reasons 401(k)s haven’t replaced traditional pensions as a source of retirement security; the other causes include low participation rates by employees, a fairly large number of employers that don’t even offer plans, low savings rates and shaky asset management decisions by retirement investors.

Related posts:

1. Why people withdraw funds from retirement accounts
2. Final tally on 2008 retirement accounts shows 24 percent drop
3. New law gives a boost to surging workplace Roth accounts
4. More families raiding retirement accounts to pay for college
5. Health Savings Accounts have a limited role in funding retirement health, study says

Tags | 401(k)