401(k)s Have $70 Billion Problem: Report

 •Workers now withdraw or breach more than $70 billion annually out of their 401(k)s for nonretirement needs;

 •Penalized withdrawals increased from $36 billion to about $60 billion between 2004 and 2010;

 •Workers in their 40s are most likely to breach their savings for nonretirement needs.

"This research shows that employers are not getting the ROI that they may think they are from their retirement investments," HelloWallet founder and CEO Matt Fellowes said in a statement. "Investing in retirement savings is essential for all Americans, but this study demonstrates that a large share of U.S. workers lack the basic financial skills needed to actually benefit from those savings, and it's costing both them and their employer dearly."

The research also finds that only a small percentage of employees (8%) are withdrawing funds because they have lost their jobs. Instead, 75% of those who have made early withdrawals have done so because they lack basic money management skills and need to meet basic money management challenges, such as emergencies, credit card payments and health care. In many cases, better planning and guidance would put them on a track to avoid costly mistakes, take advantage of the tax incentives and accumulate the savings needed for retirement.

American companies now spend the aforementioned $118 billion annually on retirement contributions with the expectation that employees will take maximum advantage of these programs to improve their financial well-being. The new research suggests that employers' massive investment is not always delivering the intended results.