The survey's findings illustrate the impact on the retirement outlook of un/underemployed workers. Just over half (53 percent) of those who are unemployed or underemployed were offered a 401(k) or similar plan by their most recent employer; and, of those who participated in the plan, over one-third (35 percent) indicated they have taken a partial or full withdrawal since becoming unemployed or underemployed.

Unemployed workers (42 percent) are more likely to have taken a withdrawal than underemployed workers (28 percent). As length of un/underemployment extends to beyond one year, so does the likelihood of taking a withdrawal from a 401(k) or similar retirement plan account: nearly four in ten (39 percent) who have been un/underemployed for over one year reported taking a withdrawal compared to one-fifth (20 percent) of those who have been un/underemployed for less than one year.

"Taking early withdrawals from qualified retirement savings plans, incurring the associated taxes and penalties, and missing out on compounded growth over a long-term savings horizon can have a devastating impact on a worker's retirement security," said Collinson. "It is vital for workers to do all they can to help avoid tapping into their retirement savings."

The survey also offers insights about members of the work force who are most likely to be unemployed or underemployed, including: over 40 years old (65 percent); without a college degree (63 percent); male (54 percent); and single (54 percent).

Additionally, workers who have been un/underemployed for less than a year are more likely to be unemployed but looking for work (59 percent), while after one year, those who have been unemployed become more likely to stop looking for work (7 percent), to retire (14 percent), or to find full-time underemployment (39 percent).

The big question, then, becomes what can displaced workers do to improve their individual retirement outlook? While the single greatest opportunity for unemployed and underemployed workers is to regain meaningful full-time employment, the survey report suggests tips that may help to improve their retirement outlook, including: taking on a part-time job; updating job skills; considering obtaining a college degree; avoiding taking withdrawals from qualified savings accounts; and weighing retirement benefits as part of their total compensation package.

The retirement services industry, media, employers, plan sponsors, and policymakers also have an important opportunity to help unemployed and underemployed Americans improve their retirement prospects. The Transamerica Center for Retirement Studies gives specific recommendations, which include:

Retirement Services Industry and the Media

• Expand outreach efforts and promote available savings and retirement planning tools and resources;
• Promote awareness of tax incentives for savings, including the Saver's Credit and Catch-Up Contributions; and
• Promote awareness of the financial penalties of taking withdrawals from 401(k) and other retirement savings plans.

Employers and Plan Sponsors

• Offer competitive retirement benefits and encourage participation;
• Add, increase and/or reinstate matching contributions to 401(k)s or similar plans; and
• Encourage employees to use the educational resources offered by their retirement plan providers.

Policymakers

• Expand the Saver's Credit by raising income eligibility requirements so more filers are eligible;
• Expand Catch-Up Contributions by raising limits and lowering the eligible age;
• Extend the 401(k) loan repayment period for terminated plan participants and eliminate the six-month suspension period following hardship withdrawals;
• Require retirement plan statements to state participant account balances in terms of a lifetime income as well as a lump sum; and
• Expand retirement plan coverage to more workers by expanding the tax credit for employers to start a plan and facilitating the opportunity of employers to participate in existing plans by implementing reforms to multiple employer plans.

"Today's workers are expected to self-fund a substantial portion of their retirement income," Collinson said. "If displaced workers fail to overcome their retirement savings setbacks, due to unemployment or underemployment, society may ultimately bear the cost when future generations of senior citizens run out of savings. This will only add further strain on Social Security, Medicare, Medicaid and other social services programs for the elderly."