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Cerulli: Most 401(k) participants delaying retirement

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Nearly six in ten 401(k) participates who delay retirement cite a deficiency of retirement savings as a major factor in their decision, new research shows.

Cerulli Associates, Boston, publishes this finding in a new report: “Evolution of the Retirement Investor 2012: Understanding 401(k) Participant Dynamics and Trends in Rollover and Retirement.” The survey provides data on pre-retirees, retirees and post-retirement transactions and behavior.

The survey shows that 58.4 percent of 401(k) plan participants identify “not enough retirement savings” as a major contributing factor for delaying retirement. An additional 23.5 percent say the savings shortfall has “somewhat” affected their decision to delay.

The retirement savings shortfall is the most commonly cited reason for delaying retirement. Other contributing factors that respondents identify as having a major impact on their decision include “outstanding debt” (29.7 percent of respondents), financial market stability (28.2 percent), housing values (27.3 percent), medical expenses (15.8 percent) and unemployment (15.5 percent).

Most of the survey’s respondents also indicate that they took action with regard to a previous 401(k) balance immediately or within in one year of leaving their former employer. Among boomer plan participants ages 50-59, 48.9 percent took action immediately after leaving and 25.5 percent took action within one year.

An addition 11.4 percent of these boomers say their previous 401(k) account is still with their old employment. Fewer than one in ten say they took action more than two years after leaving their employer (7 percent) or within two years of leaving (7.1 percent).

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Among seniors ages 60-69, the results of the survey are as follows:

57.1 percent—immediately after leaving

16.8 percent—within a year of leaving

14.3 percent—account still with old employer

8.9 percent—more than two years after leaving; and

2.8 percent—within two years of leaving