NU Online News Service, Jan. 21, 2004, 5:42 p.m. EST – Older workers were about as likely to have stock in their 401(k) plans in 2001 as younger workers were.[@@]
Many investment experts say workers who are nearing retirement age should put a higher percentage of their savings in bonds and other interest-earning assets and a lower percentage in stock and stock funds.
The theory is that older workers need some stock to protect themselves against inflation, but that older workers have less time than younger colleagues to overcome the effects of short-term slumps in the stock market.
Craig Copeland, a researcher at the Employee Benefit Research Institute, Washington, has compared 2001 asset allocations for individual retirement accounts and 401(k) plans with 1992 IRA and 401(k) plan allocations. The results, published in the February issue of the EBRI Notes newsletter, show that holders of IRAs seem to be following the experts’ advice to pull back from stock and stock funds as they age.