Administration April 10, 2006

401(k) Rollover Assets in Annuities Quadruple Since 2000

October 28, 2004 (PLANSPONSOR.com) - The amount of assets being rolled over into annuities from 401(k) plans is increasing rapidly, according to the Spectrem Group.
Reported by

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.

«