This study examines the impact of borrowing from and cashing out of retirement accounts on the perception of retirement preparedness among the working population in the United States. Grounded in the Theory of Planned Behavior, our research explores how attitudes, subjective norms, and perceived behavioral control influence these financial behaviors and their subsequent effect on retirement confidence. We used logistic regression to analyse the 2023 Survey of Household Economics and Decision-making (SHED) data. We found that cashing out retirement savings significantly diminishes the perception of retirement preparedness, whereas borrowing does not exhibit a similar effect. Key determinants, such as health status, income, education level, and availability of emergency funds, significantly influence perceived retirement readiness. These findings underscore the critical need for financial literacy and strategic retirement planning to mitigate the adverse effects of early withdrawal behaviors on long-term financial security.
