Thursday, July 28, 2005

Off-topic for me - 401(k) plans

Since I work for one of the major HR consulting firms, I heard this statistic and didn't believe it. Then I saw it written on (ok - now you know I don't work for Hewitt - and no, I don't consider them a real consulting firm anymore)

Hewitt says its study of nearly 200,000 workers who participated in their
companies' 401(k) plans found that 45 percent elected to take a cash
distribution upon leaving their jobs. The remainder either kept their savings in
their current employer's 401(k) plan (32 percent) or rolled the money over to a
qualified IRA or other retirement plan (23 percent).

Don't people realize what the huge hit in taxes and early withdrawl fees are? If people are going to cash out, just don't bother investing!!! You'd just lose money!!! (I'm not saying not to invest - just keep the cash in the retirement fund)