Navigating personal finances has been rocky this year. As shown in the latest Economic Sentiment Index reading, confidence in personal finances reached a new low in over a year. Among factors leading the decline, high interest rates, 22-year high mortgage rates, and the resumption of student loan repayments all have many consumers looking into alternative methods of financing. For some, this means tapping into retirement savings early – a savings plan 68% of American households currently report they have (e.g., IRA, pension plan, or other retirement funds).

In fact, this trend has already taken shape. According to CivicScience data from last year, one in four Americans who have retirement funds and are in the labor market have used their retirement funds earlier than expected since the pandemic began. As of September 2023, 29% of non-retired U.S. adults with retirement funds report they’ve made one or more early withdrawals, with the majority having done so over the last twelve months (22%). Another 11% haven’t accessed their retirement savings early, but intend to in the future. This sums to 40% of non-retired Americans who have accessed their retirement savings early or plan to. 

Millennials most likely to have already made an early withdrawal, Gen Z most likely to intend to – perhaps due to student loan payments resuming. 

Americans aged 25-34 are the most likely to say they’ve made one or more early withdrawals over the last 12 months (29%) or at some point in their life (11%). A slightly lower percentage of eligible Gen Z adults aged 18-24 have also accessed their retirement savings early (25%) – with Gen Z the most likely to intend to in the future, at a whopping 33%. 

High intent among Gen Z could be attributed to the resumption of student loan repayments, as data show that this generation expresses the highest concerns about repaying their student loans. Plus, severe student loan concerns are strongly associated with tapping into savings early. 

Conversely, adults aged 35-54 are the least likely to claim they’ve tapped into retirement savings early. Over seven in ten of this age group claim they haven’t made any early withdrawals and aren’t planning on it. This is likely because this age group is the least likely to report they have retirement funds in general. Adults 55+ – the age group with the highest percentage of retired Americans – are also less likely to have made any early withdrawals (69%). 

Additionally, men and women are nearly equally likely to say they’ve made an early withdrawal over the last 12 months (22%-23%), and an equal percentage intend to do so (7%). However, women are three percentage points more likely than men to claim they haven’t made an early withdrawal over the last 12 months, but have done so previously. 

Who else intends to tap into retirement savings early?

  • Consumers who feel they have ‘much’ or ‘somewhat’ more than enough money in investments (including retirement savings). Just under one-quarter of these respondents (22%) have not made an early withdrawal but intend to do so. This compares to 7% of respondents who claim they invested ‘not enough’ or ‘not quite enough.’ However, those who feel better about how much they have invested are less likely than those who feel worse about it to already have taken an early withdrawal over the last 12 months (22% compared to 27%). 
  • Those with an annual household income of less than $50,000. Thirty-five percent of this income bracket have taken an early withdrawal at some point in their lives, and another 18% haven’t but plan to do so – outpacing other households.
  • Americans most worried about improving their credit score. Forty percent of those most concerned about their credit score say they intend to take an early withdrawal in the future. Additionally, Americans most concerned about ‘managing debt,’ such as student loans, credit, etc. (40%), and those most worried about ‘income and/or job security concerns’ (35%) are the most likely to say they’ve already tapped into their retirement funds over the last 12 months. 
  • Consumers in craftsman/laborer/farm careers. Nearly a third of Americans in these fields intend to tap into retirement savings early. Whereas those in computer, technical, or medical roles are most likely to report they’ve already tapped into funds in the last 12 months (29%).
  • Bank-switchers. Twenty-eight percent of Americans who are ‘somewhat’ or ‘very’ likely to switch banks in the next three months intend to access their retirement savings early. Another 42% have made an early withdrawal either in the last 12 months (31%) or previously (11%). 

CivicScience has a constant pulse on the latest financial news and trends shaping consumer behavior today. Meet with us to learn how they are impacting your consumers – plus, how you can leverage our InsightStore database of over 130 million consumer profiles to make well-informed decisions for your brand.