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This is the ‘billion-dollar blind spot’ of 401(k)-to-IRA rollovers, Vanguard finds
Many investors unknowingly make a costly mistake when rolling their money from a 401(k) plan to an individual retirement account: leaving their money in cash.
Rollovers from a workplace retirement plan to an IRA are common after reaching certain milestones like changing jobs or retiring. About 5.7 million people rolled a total $618 billion to IRAs in 2020, according to most recent IRS data.
However, many investors who move their money to an IRA park those funds in cash for months or years instead of investing it — a move that causes their savings to “languish,” according to a recent Vanguard analysis.
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