The study reveals that approximately 6.4 million people with a balance of at least $5,000 have the option to withdraw funds every year.
Of those confronted with the option:
- 38% – elect to roll all of the distribution into an IRA (51% of the assets)
- 23% – leave the money in their former employer’s retirement plan
- 32% – took the cash and paid taxes on it.
The study, reported by Dow Jones, also found that professional investment advisors were involved in the decisions affecting more than half (60%) of these assets, some $121 billion.
Those rolling balances to an IRA noted that the number 1 criteria for choosing the IRA provider was an existing relationship with the provider outside of the plan.
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