We can all see how it might be tempting. But with a quarter of Americans prematurely withdrawing money from their pensions to pay for mortgages, loans or just to keep their heads above water, the U.S is storing up a serious financial headache for years to come.
A study by the Wall Street Journal Online/Harris Interactive Personal Finance has reported that a quarter of U.S adults who are actively planning for their retirement – and there are few enough of these in America anyway – are undoing all their good work by prematurely withdrawing money from their retirement investment products.
The poll of nearly 3,000 people found that the most common reasons for such premature withdrawals included a family member losing a job and the cost of a down payment on a home.
The most common age for such withdrawals to begin was 35 – just the age when many people are under the most financial pressure, including starting a family, supporting elderly dependents perhaps for the first time and looking to buy their own property.
Perhaps unsurprisingly, wealthier respondents (those with income of at least $50,000) were less likely to have prematurely withdrawn funds.
Those in the lowest income tier, or under $35,000, were more likely to be affected by a death in the family and require premature withdrawals, although this was relative, as about two thirds were not actually putting any money aside for retirement anyway.
Adults employed full-time felt the least pressure to withdraw funds prematurely, with nearly seven out of 10 of those actively planning for retirement never having done so.
The part-time employed experienced the more pressure when it came to housing-related expenses and were more likely prematurely to withdraw funds for a down payment on a home and for mortgage payments.
Worryingly, nearly a third of adults who had prematurely withdrawn funds could not pay them back, and 45 per cent either could not or had not begun to do so. Those aged 45-54 were more likely to be unable to pay back.
Even among the highest income earners, or those earning more than $75,000, more than a quarter could not pay back their premature withdrawals.
And the lowest income earners were more likely not to have begun to pay back their premature withdrawals.