Wealthy Americans Leaving Workplace Retirement Plan Assets Behind

March 2, 2007 (PLANSPONSOR.com) - New research by a Cambridge, Massachusetts-based firm found that a third of affluent Americans have a significant portion of their investable assets in a former employer's retirement plan or an IRA.

A news release from Cogent Research said its study found that of the 76% of wealthy Americans that have an employer-sponsored retirement program, nearly half (44%) have assets sitting in a former employer’s plan. This proportion is even higher (53%) among the wealthiest Americans – those with more than $5 million in investable assets.

According to the news release, the average amount of assets invested in plans of former employers is $259,521, or on average 28% of an affluent American’s investment portfolio. Seventeen percent of those with assets in a former employer plan have more than half of their total investable assets, exclusive of real estate, in such plans.

A roughly equal proportion (13%) of those with investable assets of $100,000 to $250,000, have 76% to 100%, virtually their entire investment portfolio, in the plan of a former employer, according to Cogent Research.

More than half of respondents (57%) who said that a portion of their investable assets are still in a plan sponsored by a former employer continue to be employed full-time outside of the home. Only 14% are fully retired and 9% semi-retired.

Sixty-two percent of affluent investors with assets in a former employer’s plan have not moved these assets despite at least one current active adviser relationship, the study found. Among the remaining 38% who say they do not currently use an adviser, younger investors, particularly those ages 43-51 are more likely than their older counterparts to leave assets in the plans of former employers.

Cogent Research’s study of 4,000 affluent and high net worth Americans will be available later this month, the company said.

The study includes a survey conducted online of a representative cross section of 4,000 adults with at least $100,000 in investable assets with significant participation of high net worth investors with more than $2 million in investable assets. Cogent conducted the survey between October 6 and November 1, 2006.