Abstract This article examines early withdrawals from tax-advantaged pensions and retirement accounts among prime working-age adults (ages 25–54) in the USA, a key component of what has been called a “hidden welfare state.” Using the 2018 Survey of Income and Program Participation linked to restricted-access Internal Revenue Service tax records, the analysis shows that household surveys capture only 30 per cent of total retirement income and just 11 per cent of recipients in this age group. Correcting for this underreporting reveals that pension and retirement account withdrawals constitute a larger source of cash income for prime working-age adults than all social program income combined. Withdrawal behavior is widespread across demographic groups and not confined to households experiencing observable shocks. Treating retirement accounts as an income source rather than solely a tax expenditure provides new evidence on how tax-advantaged private savings function as a social policy institution.
Daniel Thompson (Wed,) studied this question.