Fidelity Investments' latest report on 401(k)s has both good news and bad news about our preparedness for retirement.
The good: The average 401(k) balance managed by Fidelity reached a record
The bad: More than a third (35%) of 401(k) participants cashed out accounts when they left their jobs in 2013. That number is even higher among younger participants ages 20 to 39.
The increase in retirement account balances is "great news," says
She says Fidelity is very concerned about the number of people who cash out their 401(k)s when they change jobs.
"What's concerning there is many people, when they cash out, I don't think they fully realize the long-term impact," Thompson says. "In the short term, they will get cash, but in the long term, they are missing out on what that money could grow to."
"Individuals who cash out of their 401(k) plans are committing the equivalent of investment suicide," says
Thompson said the average cash-out is
"What you're really losing is a lot more than
The other shock for people withdrawing that
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