Insights Blog

Retirement Savings Aren't for Emergencies

November 15, 2016

Economic shocks, such as job-loss, have a particularly adverse effect on the retirement savings of workers in low-income households, exacerbating retirement savings inequality. Low income households are more likely than moderate- and upper-income households to experience economic shocks. Workers in low-income households are also more likely to withdraw from their retirement account after a shock. ReLab's study shows that these shocks have significant effects on the finances of low-income households, causing up to a third of all withdrawals, and possibly more.


“It is not that low-income households are making the wrong decisions, they just have too many obstacles to overcome,” said Siavash Radpour, a ReLab research associate. The policy recommendations of this research include a prohibition on pre-retirement withdrawals and a contribution mandate in the form of Guaranteed Retirement Accounts.