Wednesday, December 14, 2005

We are still so screwed....

And I can't actually blame Bush for this:

About 43% of people who received a retirement-plan distribution from a workplace plan through 2003 rolled their money into another tax-qualified plan, such as an individual retirement account or another employer plan -- thus avoiding an immediate tax hit -- up from 19% who did so 10 years earlier, according to a new report by the Employee Benefit Research Institute, a nonprofit, nonpartisan research group.

Meanwhile, 15% of savers cashed-out their lump sum to buy consumer goods such as a new car or to pay for everyday expenses, down from about 23% of savers who did that with their distributions through 1993, the study found.

It's likely that savers understand their retirement plans better, said Craig Copeland, a senior research associate with EBRI and author of the report. But companies have also gotten better at marketing rollover products, he noted...

The report covers workers with defined-contribution plans such as 401(k)s, as well as those who are able to take lump-sum distributions from a traditional pension.

Even as more savers rolled money into tax-qualified plans, there was a very slight decline in people stashing the money in a savings account or using it to invest: About 6% did that with distributions through 2003, compared with 8% who did that with distributions through 1993.

Meanwhile, a greater portion of savers used their retirement funds to pay off debts, buy a home or start a business: About 22% of those who received a distribution through 2003 did that versus about 18% who did that through 1993.

Really, pensions are being gutted, everything's on shaky ground, but 15% of all folks who can roll-over to an IRA spend it and 6% put it into a savings account?

The IRA rules need to be relaxed to allow short selling, but otherwise, it's kind of stupid that some 20% or so people are killing what is their retirement money. Especially with Republicans eyeing pensions and Social Security.

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