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Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Retirement Fund Decisions Often Left in the Balance

Retirement fund balances are often left with a previous employer. What can be gained by rolling over these accounts?

| BY Adriana Reyneri

As goes this prolonged economic downturn, so go concerns about having a sufficient retirement fund to sustain one’s senior years. Workers have lowered their expectations for a comfortable retirement according to a new Millionaire Corner retirement study based on surveys with 940 employees.

Attitudes are significantly more pessimistic than they were four years ago before the economic meltdown. For example, the share of employees who expect to have a big enough retirement fund to live comfortably dropped from 47 percent in 2007 to 39 percent this year. Layoffs, salary cuts and decreased employer contributions to retirement plans, along with battered portfolios, have contributed to a less than sunny retirement forecast.

And yet, when faced with the decision to leave their retirement fund balance in a 401(k) or roll it over into an IRA, almost a third of retirement plan participants (27 percent) choose to leave their plan balance in a previous employer’s plan for the simple reason that it’s easier to do so and they will deal with it later. Twenty-one percent said they haven’t had the time to focus on what to do with their plan balance. Half, though, did say that they chose to stick with their previous employer’s plan because they liked its investments.

No matter what their decision, or their reason, though, our study found, “respondents do not appear to have a sense of urgency about determining what to do” with their retirement fund balance. Nearly a quarter said they would make a decision about rolling over their plan balance when they have the time. Fourteen percent said they want to complete their own research while 13 percent want to consult with a financial advisor. A quarter of those surveyed said they hadn’t even thought about it.

Of those surveyed, those ages 65 and older are most likely to want to leave their plan balance in their previous employer’s plan because they liked the investments. They are also most likely to want to consult with a financial advisor in making a rollover decision. Ironically, those ages 35-49, who express the highest concerns about having enough retirement income, are most likely to play the procrastination card. They will get around to making a decision when time is available.