Distributions
The percentage of participants who rolled over their plan assets rose from 76% in 2009 to 79% in 2010. This represents fairly significant growth and may signal a growing awareness of the importance of staying invested for the long term.
The majority of participants under age 30 cashed out of their plans when they left their employment. For all other age groups, at least two-thirds rolled over their assets, including those age 60 and over who would not face a penalty for taking a distribution. Since cashing out 401(k) assets before age 59½ can significantly affect the participant’s retirement savings, sponsors should be sure participants fully understand the consequences. Special attention should be paid to those under age 30 so that they can develop good saving habits early in their careers.
Looking Forward
We believe the percentage of rollovers will rise as the importance of long-term saving becomes increasingly clear to participants.
Get more information on this topic along with supporting charts by viewing the full report.
Key Findings
- The percentage of assets rolled over increased 4% over 2009
- Those in the 20–29 age group cashed out 53% of the time in 2010 versus 56% in 2009
- Those under 20 years old cashed out 62% in 2010 versus 55% in 2009, representing a significant increase for that age group
