Survey Finds Cash Left in 401(k) Plans
May 29, 2000
Most employees changing jobs would rather roll their 401(k) assets into another retirement investment rather than cash out of the plan, according to a recent survey released by American Century Investments of Kansas City, Mo.
The survey found that only four percent of employees changing jobs would cash out of their 401(k) plans, while 77 percent said they would keep the money in some kind of tax-advantaged retirement plan.
"This is good news," said Tony Vannicola, a marketing manager with American Century, in a statement. "The majority seems to understand the importance of keeping their retirement money invested in a tax-sheltered account. They also seem to know the consequences of taking the cash - which can sometimes mean losing nearly half the money in taxes and penalties."
The results of the survey are based on the answers of 750 respondents with retirement savings or investments.
Of the 77 percent that said they would transfer their money into a retirement savings vehicle, 43 percent said they would roll their money into an IRA, 21 percent said they would move their money into their new employer's plan and 13 percent said they would leave the money in their former employer's plan.
An additional 10 percent of respondents said they did not know what they would do with their assets and nine percent had "other" plans, according to the survey.