--- title: Why America’s Retirement Savings Needs Recycling description: The focus of the piece is on the parallel between the destructive environmental actions & behaviors that Earth Day draws attention to, vs. the destructive cash out behavior wreaking ongoing havoc upon millions of Americans’ retirement. image: http://blog.rch1.com/hubfs/Set_Up_Images/Other_Generic_Images/Earth_Day_Stop_Cashouts.png --- [![Retirement Clearinghouse Logo](https://blog.rch1.com/hs-fs/hubfs/raw_assets/public/Retirement_Clearinghouse_May2022/images/logo.png?width=1000&height=648&name=logo.png "Retirement Clearinghouse Logo")](https://rch1.com/) [Privacy Policy](https://securities.rch1.com/common/PrivacyStatement.pdf) [Sponsors/Service Providers](https://rch1.com/plan-sponsors) [Individuals](https://rch1.com/individuals) [Login](https://rch1.com/#) - [Home](https://rch1.com/home-page) - [Individuals](https://rch1.com/individuals) - [Individuals Home](https://rch1.com/individuals/individuals-home) - [Who is RCH?](https://rch1.com/individuals/who-is-rch) - 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This heightened awareness is testament to how far Americans have come in both recognizing and curbing the wasteful, destructive behaviors that emerged in the decades following World War II. Those excesses have given rise to conservation and environmentalism, and were heralded by the first Earth Day in 1970.  **Today’s Wasteful Behavior: Cash Out Leakage** While we may be more environmentally-conscious these days, we don’t apply the same principles financially. There is a highly-wasteful and harmful behavior that silently robs millions of the prospect for a comfortable or timely retirement. Every year, millions of Americans will needlessly cash out their retirement savings after changing jobs, converting these savings into wasted consumption and avoidable tax penalties. Newly-compiled statistics by Retirement Clearinghouse paint a grim picture: - In 2017, approximately 14.8 million defined contribution plan participants will change jobs. - Of these job-changing participants, over 31%, or 4.7 million, will cash out their retirement savings in the first year following their separation. - Another 1.4 million will cash out their savings over the next 7 years. - In total, 6.1 million, or 42% of the job-changers from the “class of 2017” will eventually cash out over $68 billion in retirement savings. Digging deeper into the demographics of cash out leakage, the statistics further demonstrate that the participants most-affected by cash out leakage can least afford it, including: - Younger age groups, particularly Millennials - Lower income groups - Women - Minorities, particularly African-Americans and Hispanics For a dramatic, visual representation of the problem of cash out leakage, visit Retirement Clearinghouse’s [National Retirement Savings Cashout Clock](http://www.rch1.com/national-cashout-clock), which depicts an up-to-the-minute counter of the retirement savings already cashed out in 2017. The numbers are staggering. **Solving the Problem of **Cash Out Leakage**** The good news about cash out leakage is that we understand its causes and how to prevent most of it.  A [2015 study of America’s Mobile Workforce](https://info.rch1.com/mobileworkforce) found that most job-changing plan participants, when faced with the difficulty of [“do-it-yourself” portability](https://www.rch1.com/assets/user/media/DIY_Roll-In_Flow.pdf), simply took the path-of-least-resistance and cashed out their retirement savings, while slightly more than a third of participants who cashed out actually needed the funds for an economic emergency. From a behavioral perspective, if moving retirement savings forward to the next employer’s plan were made as easy as cashing out, then almost two-thirds of the cash out leakage problem could be solved. Consequently, [Auto Portability](http://www.rch1.com/auto-portability) is the first innovation that could spell the end for excessive cashout leakage. Auto Portability is the routine, standardized and automatic movement of an inactive participant’s small balance retirement account (less than $5,000) from a former employer’s retirement plan to an active account at a new employer’s retirement plan, when a participant changes jobs.   Auto Portability has gained some influential supporters who believe that reducing cash out leakage could deliver a massive benefit to our economy and is achievable by the private sector. [New research from EBRI](https://info.rch1.com/retirement-plan-portability-public-policy-deck-landing-page), presented on March 30th at a forum hosted by the [Financial Services Roundtable](http://fsroundtable.org/), has calculated the present value of Auto Portability’s benefits at $2 trillion. This analysis places Auto Portability ahead of auto IRA initiatives and just behind universal defined contribution coverage in terms of the impact on the total retirement savings shortfall. By any definition, this analysis clearly establishes Auto Portability as a leading public policy initiative.  At the same event, former Sen. Kent Conrad of the [Bipartisan Policy Center](http://www.bipartisanpolicy.org) expressed his support for a private-sector “retirement security clearinghouse” to help job-changers consolidate their retirement savings. The BPC’s position clearly demonstrates the strong bipartisan support that Auto Portability enjoys, and that it’s benefits could be efficiently delivered without imposing a burden on America’s taxpayers. On Earth Day 2017, we’re seeing encouraging signs that the problem of retirement savings cash out leakage will finally get the attention that it deserves.  *[Featured on 401kSpecialist](https://401kspecialistmag.com/why-retirement-savings-need-to-be-recycled/)*  [Back](https://blog.rch1.com/blog) [![Retirement Clearinghouse An RLJ Company](https://blog.rch1.com/hs-fs/hubfs/raw_assets/public/Retirement_Clearinghouse_May2022/images/footer_logo.png?width=1000&height=648&name=footer_logo.png "Retirement Clearinghouse An RLJ Company")](https://rch1.com/) 1916 Ayrsley Town Boulevard Suite 200 Charlotte, NC 28273 - [Individuals](https://rch1.com/individuals) - [Plan Sponsors](https://rch1.com/plan-sponsors) - [Auto Portability](https://rch1.com/auto-portability) - [Company](https://rch1.com/company) - [News & Information](https://rch1.com/news) - [Mission](https://rch1.com/company/mission) - [Careers](https://rch1.com/company/careers) - [Contact Us](https://rch1.com/contact-us) - [Logins](https://rch1.com/#) - [Disclosure Central](https://rch1.com/individuals/learning-center/resources-%26-downloads) - [Do Not Sell or Share](https://blog.rch1.com/blog/why-americas-retirement-savings-needs-recycling#decline-cookies) - [My Personal Information](https://blog.rch1.com/blog/why-americas-retirement-savings-needs-recycling#decline-cookies) - - - Individuals should consult their tax advisers or legal counsel for advice and information concerning their particular situation. Retirement Clearinghouse does not give legal, investment, or tax advice. IRA account fees and product information provided by Retirement Clearinghouse, LLC is subject to change without notice at the discretion of the IRA Provider. RCH Shareholder Services is a wholly owned subsidiary of Retirement Clearinghouse, LLC and a registered transfer agent with the U.S. Securities and Exchange Commission. © 2026 Retirement Clearinghouse, LLC. This site is directed at, and made available to, persons in the U.S. and Puerto Rico. [Sitemap](https://rch1.com/sitemap)