Ann Carrns, of the New York Times, has made available for download her article, A New Option for Moving Retirement Savings When Switching Jobs, published in [NAME OF PUBLICATION]. The abstract is as follows:
Moving retirement savings when switching jobs is about to get easier for millions of workers with small balances.
The changes aim to stem what retirement researchers call a “leakage” of savings from 401(k)s and other workplace retirement accounts when employees change jobs.
Unlike workers with fat retirement accounts, those with less than $5,000 usually can’t leave the funds at a former employer’s plan when they change jobs. (Some employers may allow it, but they don’t have to and most don’t.) Workers end up taking out the money — either voluntarily or because they are pushed out by employers that don’t want to manage a glut of small accounts. Many don’t reinvest the cash, denting their retirement savings.
These “cash outs” can result in significant shortfalls in retirement savings, according to a 2020 report from the Employee Benefit Research Institute.
Click here to view Ann Carrn’s summary of A New Option for Moving Retirement Savings When Switching Jobs
Posted by Kaitlyn Bare, Associate Editor, Wealth Strategies Journal.