Ensuring continual earnings with 401(k) rollover contributions

When workers switch companies, they often choose to consolidate their retirement savings by rolling over their former company’s 401(k) contributions into a new individual retirement account or IRA account. However, an analysis conducted by the investment firm Vanguard found that Americans may neglect to voluntarily reinvest when rolling over their 401(k) contributions.

According to an article published in Money, this will cause the money to remain as cash — not earning stock market returns — and could cost Americans about $130,000 by the age of retirement. Further, Americans aged 20 to 29 years, those with lower account balances and women were the most likely to leave their IRA balances as cash.

Read more: Money

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