海角大神

It is easy to mock Senator Marco Rubio, who听听last September. The GOP presidential hopeful, who made about $230,000 last year, told Fox News听he needed the dough to prepare for his campaign, buy a new $3,000 refrigerator, and fix his busted a/c. As it happens, he is far from alone.

Using retirement money to buy a high-end appliance may not be the wisest financial decision. Investing the cash听in a presidential run may be more prudent. After all, as the Clintons have shown, post-White House money-making opportunities can be quite lucrative. And even also-rans听can turn听failed听races into money-making career enhancers. Just ask Mike Huckabee.

But it turns out that Rubio is not the only 40-something draining a retirement account. Substantial assets听leak听because people under age 59 陆 take early withdrawals or borrow against their IRAs or 401(k). And the problem raises an important and challenging policy question:听 Should the money in these accounts be available for non-retirement purposes?

Exactly how much is lost is unclear, but it is not a trivial sum. My Urban Institute colleagues Barbara Butrica, Sheila Zedlewski, and Philip Issa听听that more than 8 percent of working-age retirement account owners made at least one withdrawal between 2004 and 2005. And they pulled out about 20 percent of their total balances.

Overall, at least 1.5 percent of all retirement savings leaks out of the system each year, although some studies estimate it is much more than that. And even withdrawals at the low end of the estimates听can result in a substantial reduction in retirement savings.听Alicia Munnell and Tony Webb at the Center for Retirement Research at Boston College, early withdrawals of about 1.5 percent听ultimately reduce total IRA and 401(k) wealth at retirement by about one-quarter.

In most respects, Rubio is atypical. Unlike many who take money out early, he鈥檒l still probably have a secure retirement. The Urban study found that those most likely to withdraw early听were age 25-34, had low-incomes, and had little net worth. African-Americans are more likely to withdraw than whites. And those听who pull听out money when they are young can significantly lower their standard of living in retirement.

Interestingly, several of the studies found that divorce, death of a spouse, or job loss correlate strongly to withdrawals. Not surprisingly, these shocks have their biggest effects on low-income workers.

In 2013, Robert Argento, Victoria Bryant, and John Sabelhaus of the Federal Reserve听that how the Great Recession affected withdrawals. After all, if income shocks increase withdrawals, you鈥檇 think the effects would be especially strong when millions of Americans lost their jobs.

It turned out that while early withdrawals were higher after 2007 than before, they were not that much higher. And they seemed to merely continue a long-standing national pattern of steady increases. Still, in听2010, according to the Fed study, nearly half the value of new contributions by working-age households听were offset by early withdrawals.

What to do? How do policymakers distinguish between low-income people who dip into retirement savings to cushion a financial shock and someone earning a six-figure income who wants a new Sub-Zero? How does government encourage retirement savings鈥攖he purpose of the tax subsidy, after all鈥攁nd still give workers some financial flexibility when they really need it?

Early withdrawals are not a cheap way to get money. They are subject to both tax and, in most cases, those younger than 59 陆 also owe a 10 percent penalty.听 In addition, people of working age听can only听pull money听from 401(k)s when they听change jobs or for reasons of hardship (for instance, for medical or funeral expenses or to prevent foreclosure or eviction). IRA withdrawals can be made for any reason, though they听are still subject to taxes and usually penalties.

Should the rules be tougher?

We know that even modest policy adjustments can change behavior. In a 2012听National Tax Journal听, my Tax Policy Center colleagues Len Burman and Bill Gale, along with Norma Coe and Michael Dworsky, looked at how policy changes in 1986 and 1992 encouraged people to hang on to their retirement accounts when they changed jobs. They found that raising taxes on cash-outs encouraged people to roll over their accounts to IRAs instead of pocketing the money. Merely relabeling the added tax as a penalty or withholding taxes on cash-outs also increased roll-overs, though neither changed the amount of tax owed.

Munnell and Webb think it鈥檚 time for Congress to reconsider tax-advantaged savings: Should they be focused entirely on boosting retirement assets or should they play the dual role of encouraging savings for retirement and for unexpected hardship at working age?

It is a good question. And the personal experience of Marco Rubio鈥攚ho, after all, has proposed a major听--may prove a useful spark for the conversation.