Boomers reaching 65 have a lot of financial decisions to make when facing retirement.
Let's say you are changing careers, switching employers or retiring. Possibly, you have saved a lot of money in the retirement plan that was sponsored by your employer?
If so, welcome to the swelling ranks of Americans that are deciding what to do with these dollars that have amassed over their careers. Ted Benna, president of a Bellefonte, Pa.-based 401(k) organization, suggests that there will be $10 trillion of retirement money available in the next decade or two.
As boomers start reaching the magic age of 65, which marks formal retirement, the dollars available for rollover (rollover means the ability to switch from the employer's plan to a self-directed IRA), will represent substantial personal wealth to many Americans.
What does this all mean? Once you leave your employer because of job change or retirement, your retirement plan,usually a 401(k) or profit sharing, will probably be transportable. That means you no longer have to own the mutual funds that were previously offered to you. It also means you can select and direct who will have your assets, how they will be invested and how you want to do business.
Although you may not take the money out of a retirement plan without paying taxes (and potential penalties if you are under age 59½), you can move it anywhere you choose as long as it lives under the retirement plan umbrella. That really opens the playing field.
What's interesting is that Spectrem's research suggests that 85% of the people that withdrew their money from plans did not leave it with their original plan provider. Part of the reason is that they have not been actively wooed to stay on as an individual client.
But things are a-changing. According to Spectrem's research, 35% of all assets in mutual funds are retirement-related and growing every day to the tune of about 13% a year. Brokerage houses, mutual fund companies, banks and insurance companies have woken up to the potential of this marketplace.
And we are the market.
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