From May 2000 to the same month in 2004, the percentage of 401(k) rollover assets finding their way into annuities quadrupled to 16%, up from 4%. This trend owes its roots to the older generations, according the Spectrem Group’s survey, entitled “The IRA Rollover Market 2004.” One-third of the World War II generation who rolled over their 401(k) assets chose to invest in annuities, while only 24% of Baby Boomers and 20% of Gen-Xers made the same decision.
About 10 million people made the decision to rollover their 401(k) account assets in the 12 months preceding May 2004. This amounts to around $362 billion in assets, according to the study. Individuals usually roll over their assets when they leave a job or retire, although some retirees choose to leave their assets in an employer plan.
The survey includes the responses of 784 investors who made rollover decisions during the 12-month period through May 2004. The report is available for purchase from Spectrem Group at 312-382-8284.