Fidelity Investments reported Tuesday nearly one-third of its plan participants who recently made a job transtion aren't sure what to do with their retirement savings.
While Fidelity data shows about one-third of participants move their money from a former employer’s plan within four months after a job transition, those who remain in their plan do so for a variety of reasons.
According to the study, which surveyed participants who had left their employers at least four months prior, nearly three-quarters (71 percent) of respondents said they are consciously keeping their assets in an old plan for the time being. The top reason stated (59 percent) was satisfaction with the plan features or services and access to specific investments. At the same time, more than one-quarter of respondents (27 percent) indicated that a lack of time or mind share has prevented them from taking any action.
“The findings of this study highlight reasons why some investors stay in their old plans, and it also stresses the fundamental need for more education on the basic options investors have with these assets,” said Sarah Walsh, vice president, Fidelity Investments.
When respondents were asked if they are planning to take any action within the next year, nearly a quarter (24 percent) indicated they were not sure, and almost one-in-five (18 percent) stated they were going to move the money to an Individual Retirement Account (IRA) or their current employer’s workplace savings plan. But the majority (57 percent) stated they were planning to keep their investments in their old plan for the next 12 months.
Fidelity Outlines Considerations for Investors When Reviewing Options
While consolidation and control of assets (35 percent), more investment options (26 percent) and lower fees (37 percent) were listed by respondents as the top reasons they would move their former workplace plan assets to an IRA or new workplace plan, the decision can be complex and overwhelming to many investors.
“Quite often when an investor leaves a job, they have a significant portion of their retirement savings in that former employer’s plan,” said Walsh. “This is why it’s critical for investors to consider their options carefully. Fidelity has trained representatives that can educate investors and then help them determine which option may make sense based on their individual needs.”
As part of this ongoing guidance, Fidelity has published a new Viewpoints article that details the various options and the specific considerations that participants should ask themselves when making a decision.
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