Younger workers are more likely to cash out retirement plans when changing employers, and are less likely to regret doing so—perhaps not realizing what it will cost them at retirement.

Read: 5 questions retirement plan sponsors must ask

So finds a new study from the Defined Contribution Institutional Investment Association, which looked at the psychology underlying plan leakage—the money that leaves workers’ retirement plans before they ever hit retirement age.

According to the study, while a sizeable percentage of workers cashed out at least once prior to retirement, younger generations are more likely to do so.

Read: Fewer DC plan choices equal more savings

Nearly a quarter of boomers did so at least once during their careers, but a third of GenXers and millennials pulled out the cash.

An alarming possibility is that the majority of those who cashed out have the least saved toward retirement.

Although the behavior happens at all income levels, more than 40 percent of workers with less than $25,000 in household retirement savings cashed out at least once in their working lifetime, compared to only 23 percent of workers with more than $150,000 in retirement savings.

Read: 5 signs of employee financial stress

In addition, about 75 percent of cashouts involved accounts with assets of less than $20,000, suggesting that small amounts of savings might be considered not worth the effort required to roll them over into a new employer’s DC plan.

Read: Should plan sponsors restrict access to 401(k) loans?

And among those who don’t roll over plan assets into a new employer’s plan, about 20 percent of respondents across all generations cited such rollover barriers as not knowing how to roll over assets, not having time to do so, or not prioritizing the issue.

Another scary trend among millennials is the increasing likelihood that they’ll use such cashouts to fund non-emergency expenses, like weddings or cars—42 percent said they had done so—while less than 25 percent of GenXers said they’d used the money for something that wasn’t an emergency.

Millennials are also more likely to say they plan to cash out a current plan before retirement (20 percent, compared with just 7 percent of boomers) and are less likely to express regret over a cashout (36 percent of millennials said they were sorry they’d done so, compared with nearly half of GenXers and boomers).

Instant Insights /

Retirement plan leakage: Boomers feel regret, millennials not so much

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