Here’s an odd retirement trend: Millions of workers who contribute to a 401(k) plan do so in order to have money when they retire. But when they do retire, in increasing numbers, they are’t touching those accounts - at least not right away.
More than half of workers — 55 percent — are choosing to leave their assets in their former employer’s 401(k) plan a year into retirement, according to Fidelity data on its workplace retirement accounts. Four years ago, that figure was just 45 percent.
Why does this happen? Some retirees may not touch their 401(k) plans because they don’t need the money yet. Wealthier clients avoid withdrawing from 401(k) plans until they’re 70½ years old, which is around the time they must withdraw required minimum distributions. Given that many recent retirees have done very well in the markets, Fidelity speculates that some retirees may not be sure what to do with that money, such as rolling it over into another account or consolidating all of their 401(k) plans.