We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Are Employees Missing the Big Picture? Study Shows Need for Ongoing Financial Education.
- Authors
McCarthy, Mike; McWhirter, Liz
- Abstract
The article informs that 57% of 401 (k) plan participants choose to take cash payments when changing jobs, instead of rolling over the balance to their new employers' plans. Although the extent of plan participants opting for cash payments has decreased 7% in the last five years, a significant number of participants still opt for a cash payout when changing jobs. The good news is that plan participants are beginning to show resistance to taking the money, paying taxes on the withdrawal and spending it. The bad news is that many employees seem to be missing the big picture about the value of a 401 (k) plan in helping them save for retirement. What is alarming is that many participants view the cash payment as a sudden windfall, and that is a big mistake. It's important to realize that even small balances in a qualified plan could grow substantially over time. The primary reason for this emerging trend is a lack of awareness about the short- and. long-term consequences of taking distributions in cash. One explanation may be that plan sponsors often focus their attention on the beginning and end of the 401 (k) process, enrollment and retirement. INSETS: How to Remedy the Lack of Awareness;Interactive Financial Education Can Make a Difference In....
- Subjects
401(A) plans; FINANCIAL planning; EMPLOYEES; EMPLOYERS; RETIREMENT benefits; AWARENESS; TAXATION
- Publication
Benefits Quarterly, 2000, Vol 16, Issue 1, p25
- ISSN
8756-1263
- Publication type
Article