{"id":351659,"date":"2026-03-18T00:20:25","date_gmt":"2026-03-18T00:20:25","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/351659\/"},"modified":"2026-03-18T00:20:25","modified_gmt":"2026-03-18T00:20:25","slug":"why-so-many-seniors-are-withdrawing-retirement-funds-too-early","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/351659\/","title":{"rendered":"Why So Many Seniors Are Withdrawing Retirement Funds Too Early"},"content":{"rendered":"\n

Try as you might to plan your ideal retirement, life is full of surprises. The reality is that the majority of Americans \u2014 58% \u2014 end up retiring earlier than expected, with the median retirement age being 62, according to Transamerica research<\/a>.<\/p>\n

That often results in seniors or those in their late 50s and early 60s pulling too much money out of their retirement<\/a> accounts too quickly.<\/p>\n

Find Out: I Retired a Millionaire \u2014 The Best $30,000 I Ever Spent Preparing for Retirement<\/a><\/p>\n

Read Next: 5 Clever Ways Retirees Are Earning Up To $1K per Month From Home<\/a><\/p>\n

\u201cIt\u2019s exciting to tap your hard-earned retirement savings for the first time. However, you need to be smart about when and how you do it,\u201d said Connor Pastoor, a vice president and banker at J.P. Morgan Private Bank<\/a> in Chicago.<\/p>\n

GOBankingRates spoke further with Pastoor to unpack why many seniors are tapping into their retirement funds early, and what they can do manage their withdrawals better<\/a>.<\/p>\n

In many cases, individuals start pulling from their retirement funds when they have eligible reasons for making early withdrawals.<\/p>\n

\u201cThe two most common reasons workers make withdrawals from their retirement accounts are unemployment and medical hardship,\u201d said Pastoor.<\/p>\n

With a job loss late in their careers, many workers end up deciding to retire earlier than planned<\/a>. Some might then take advantage of the \u201crule of 55\u201d or \u201cage 55 rule.\u201d That allows for penalty-free retirement plan withdrawals from an employer plan if you leave that particular job the year you turn 55 or older, before the normal 59 \u00bd age at which you can make penalty-free retirement account withdrawals, he explained.<\/p>\n

Discover More: 6 Key Signs You\u2019ll Run Out of Retirement Funds Too Early<\/a><\/p>\n

Yet, \u201cjust because you can access your retirement funds, it doesn\u2019t mean you should. Generally, the longer you can wait to withdraw, the better your results will be,\u201d said Pastoor.<\/p>\n

Medical hardships are also a top cause of tapping retirement funds too early<\/a>. Here too, just because you may be eligible for penalty-free withdrawals doesn\u2019t mean you should.<\/p>\n

\u201cYou can avoid the 10% early withdrawal penalty on the amount of qualified medical expenses that exceeds 7.5% of your adjusted gross income. However, it\u2019s important to remember that repayments are not allowed,\u201d Pastoor explained. \u201cIt\u2019s ultimately much harder to contribute significant assets to a retirement account than it is to take those assets out.\u201d<\/p>\n

Although you can\u2019t always plan exactly when you\u2019ll retire, that doesn\u2019t mean retirement planning is fruitless by any means. Instead, it\u2019s important to build in some flexibility and be able to adapt to changing circumstances.<\/p>\n

Even if you\u2019re not retiring early, many seniors still end up withdrawing retirement funds too early because they\u2019re not optimizing different financial buckets<\/a>. It might seem like the first place to turn to for income in retirement is an account like your 401(k) plan or IRA, but that isn\u2019t always the case.<\/p>\n

\u201cSince retirement accounts are tax advantaged, offering tax-deferred growth for traditional accounts or tax-free withdrawals for Roth accounts, the best thing the owner of a retirement account can do to compound their wealth in retirement is to stay invested in high-quality assets within their retirement accounts for as long as possible,\u201d said Pastoor.<\/p>\n

\u201cTime is your friend when it comes to investing, and the longer you stay invested without paying income taxes or capital gains taxes, the better,\u201d he added.<\/p>\n

Instead, even after you can make penalty-free retirement withdrawals, consider whether it makes sense to pull from other sources like taxable brokerage accounts. Or maybe working part-time<\/a> and leveraging savings makes sense for a few years so that you can let your retirement accounts compound enough to support the rest of your retirement comfortably.<\/p>\n

\u201cA holistic financial planning conversation with a tax or financial professional is the best way to determine if it makes sense to pull from retirement funds versus taxable assets to cover your living expenses and meet your financial goals,\u201d noted Pastoor. \u201cRemember, the devil is in the details. During a financial planning conversation, it\u2019s important to have copies of all your account statements \u2014 retirement, savings and brokerage accounts \u2014 present.\u201d<\/p>\n

From there, you can determine a strategy that supports your lifestyle both now and in the future, which often means delaying retirement account withdrawals.<\/p>\n

\u201cIt\u2019s important for retirement account owners to think of their retirement accounts as an engine for growing wealth,\u201d Pastoor explained. \u201cThe bigger the engine, the faster wealth will grow. Tap your retirement accounts sparingly and be cognizant of which bucket to pull from when planning your retirement.\u201d<\/p>\n

More From GOBankingRates<\/p>\n

This article originally appeared on GOBankingRates.com<\/a>: I\u2019m a JP Morgan Advisor: Why So Many Seniors Are Withdrawing Retirement Funds Too Early<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Try as you might to plan your ideal retirement, life is full of surprises. The reality is that…\n","protected":false},"author":2,"featured_media":351660,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,160014,176,61,60,174,175,1611,81738,1544,1830],"class_list":["post-351659","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-connor-pastoor","tag-finance","tag-ie","tag-ireland","tag-personal-finance","tag-personalfinance","tag-retirement","tag-retirement-funds","tag-retirement-planning","tag-retirement-savings"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/351659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=351659"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/351659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/351660"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=351659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=351659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=351659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}