More workers are ensuring their retirement funds remain in savings accounts.

More workers are ensuring their retirement funds remain in savings accounts.

Saving to ensure a solid financial future can be important, and those individuals with jobs may be taking this into account, especially when they are moving to a new place of employment.

Employees who have money saved in a retirement account at one job and transition to another have a higher likelihood to keep their money in these accounts than in the past, according to a report from the Employee Benefit Research Institute. This can be important, as some may be tempted to take the money and use it for other purposes.

Beyond leaving the funds in a retirement account, there are multiple ways that a person can be tempted to distribute the money. The report noted that some people will cash the money out to use as spending money, or save it through another channel. There are also individuals who will use it in a different savings manner, such as an IRA or a separate plan provided by their new employer.

Only 7.5 percent of those who took their money from their old account in 2012 decided to spend it, the report explained. More than 45 percent decided to use the funds for another savings plan that was tax-qualified. This was much higher than in 1993, when just 19.3 percent of people did this.

“What workers choose to do with their retirement plan assets upon job change can profoundly affect their financial resources in retirement, particularly in the case of younger workers and those with large balances,” said Craig Copeland, senior research associate at EBRI and author of the report. “While improvement has been made in the percentage of employment-based retirement plan participants rolling over all of their balances on job change, this behavior varied significantly across participants’ ages at the point of distribution and the amount of the distribution.”

Some still struggle to see retirement possibilities
Even with more Americans looking to keep their retirement savings in the proper accounts, there are concerns that retirement may just be too difficult.

According to a report from Wells Fargo, nearly half of Americans polled noted that they are not sure that reaching a comfortable retirement will be possible. Another 34 percent explained that working until their 80th birthday is a distinct possibility due to not having enough money saved up.

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