NEW YORK (TheStreet) -- Buffet lines all across America are getting shorter. It may be because financial advisors are getting a bit more careful in hosting all of those "retirement rollover" free lunch seminars. Mounting pressure from regulators insisting that advisors work in the best interest of their clients is likely to slow the rollover marketing machine.
Fact is, rolling a 401(k) into an IRA is not always the best thing to do. And securities enforcement agencies want you to know that -- and give you even more options.
If you’ve done the hard part -- contributing to a 401(k) as a part of your retirement savings plan -- the next hurdle you’ll have to clear is when you change jobs or retire. Workplace retirement plans have been notoriously "sticky." It’s just not that easy to move your 401(k) from one job to the next. That lack of "portability" causes many workers to simply roll over their savings into an IRA, or worse yet, cash it out.
According to a new study, 34% of Millennials and Gen-Xers and 24% of Boomers have cashed out at least one retirement account in their working lifetime. It’s a decision many of them later regret, once they consider the impact it's had on their retirement savings.
"Cash-outs and stranded accounts trace their common roots to the fact that most participants want to keep their accounts with them when they change jobs, but frankly don’t know where or how to begin the process," says Warren Cormier, author of the study and CEO of Boston Research Technologies, in a release.