More than one in three workers would consider dipping into their retirement saving early if they were to lose their job, despite knowing the consequences of an early withdrawal, according to a recent survey by American Century Investments.

The 37% of workers that would take out money early in the event of losing their jobs represents a five percentage point increase over the figure in last year’s installment of the survey.

"That statistic is not surprising given today’s tough economic times and the constant flow of news about downsizing," said Doug Lockwood, vice president of shareholder education at American Century. "But I strongly urge investors to consider all other options before using retirement money. Not only could as much as half of the money be lost to taxes and penalties, dipping into retirement accounts also can cause serious setbacks in saving for retirement."

Lockwood suggested people not compound their problems by sacrificing their future, but instead roll over the retirement funds into an IRA, where the money can continue to grow on a tax-deferred basis. He also said consolidating one’s 401(k) is another key.

Of those that hold 401(k)s or IRAs, 71% said they hold accounts at more than one financial institution. Meanwhile only 32% of workers with multiple accounts said they have even considered consolidating accounts. When asked why, they responded that they "prefer to have their money spread around." However, Lockwood cautioned that multiple accounts don’t necessarily equal diversification and can often be misleading, especially if those multiple accounts are similar.

The survey was drawn from telephone interviews with 1,025 adults, with 519 of them men and 506 women, all 18 and older.

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