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Retirement Planning > Retirement Investing

$640 Billion in 401(k) Assets Ripe for a Rollover: Judy Diamond

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Nearly one-fifth (22%) of the $2.9 trillion in total assets held in large 401(k) plans is held by retirees or pre-retirees who have yet to roll it into other plans, according to just-released analysis by Judy Diamond Associates.

Judy Diamond, a 401(k) plan intelligence provider for financial advisors, brokers and fund companies, analyzed the number of retirees still receiving benefits from or entitled to receive benefits from 14,508 401(k) plans with at least 100 participants.

The 7.4 million people in that group, out of a total of 62 million participants covered in the study, held an estimated $640 billion in assets in their 401(k) plans.

Judy Diamond says the study’s sample looked at 87% of all participants and 85% of all plan assets in 401(k) plans nationwide in 2012, the most recently available 401(k) plan disclosure documents released by the Department of Labor; they are available in Judy Diamond’s Retirement Plan Prospector database.

“Employers continue to incur costs when retirees remain in their plans, and the retirees themselves may not be best served by the structure and mix of investments in their 401(k) plans after they exit the work force,” said Eric Ryles, managing director of Judy Diamond, in a statement.

Ryles says the large rollover potential creates a potentially lucrative market for advisors. “With increasing numbers of baby boomers preparing to retire, the financial advisors who know how to find them now and offer guidance on the transition to individual retirement accounts, such as Roth IRAs, will be in the best position to grow their market share.”

IRA guru Ed Slott recently told ThinkAdvisor that advisors need to brush up on workers’ six options for what to do with their retirement plan money when retiring or shifting jobs. Slott warned that advisors who are not well-versed on these options stand the chance of losing boomer clients.


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