Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Tipping point 401k withdrawals exceed contributions
Old 06-17-2015, 12:22 AM   #1
Recycles dryer sheets
 
Join Date: May 2015
Location: NorCal
Posts: 74
Tipping point 401k withdrawals exceed contributions

Interesting article in WSJ today (subscription needed) about overall 401k withdrawals now exceed contributions. The latest available data was for 2013. I would think this would also have some effect on the overall stock market performance going forward if this trend continues.

"...We’ve reached a tipping point largely due to the combination of retiring baby boomers and younger workers who are incapable or less interested in saving..."

Here is a similar article from time.com that does not require a subscription:

401(k) Plans, Baby Boomers & Millennials: Retirement Withdrawals Exceed Contributions
__________________

__________________
FIREd_2015 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-17-2015, 04:34 AM   #2
Full time employment: Posting here.
old woman's Avatar
 
Join Date: Dec 2005
Posts: 551
I rolled all mine to a IRA the minute I retired does that count as a withdrawal?
__________________

__________________
old woman is offline   Reply With Quote
Old 06-17-2015, 07:27 AM   #3
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
Quote:
Originally Posted by old woman View Post
I rolled all mine to a IRA the minute I retired does that count as a withdrawal?
I'm guessing that it does. Personally, I tend to mentally lump 401Ks and IRAs in one big group as simply "retirement funds" as opposed to after-tax stuff. But I think most of that data used for these types of articles separates IRAs and 401Ks.

I wonder if there's any data easily available on IRA contributions, versus withdrawals?
__________________
Andre1969 is offline   Reply With Quote
Old 06-17-2015, 09:02 AM   #4
Recycles dryer sheets
 
Join Date: May 2015
Location: NorCal
Posts: 74
Quote:
Originally Posted by old woman View Post
I rolled all mine to a IRA the minute I retired does that count as a withdrawal?
The WSJ article was pretty short and didn't say what counted as a withdrawal. Even if it did I think it's still a significant event. There was a Fed paper a while back that suggested it could hod down equity valuations and another by Vanguard that concluded it wouldn't.
__________________
FIREd_2015 is offline   Reply With Quote
Old 06-17-2015, 09:27 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,288
The Times article doesn't give numbers, just adjectives. Just how big of an imbalance is this? Did it go from (IN-OUT)/(TOTAL OF ALL 401K VALUE) of some very small positive number to some very small negative number?

Does it have enough to affect the market? Or is it just a headline?

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 06-17-2015, 09:42 AM   #6
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Interesting artcle--thanks. From the WSJ article the item is based on:

Quote:
Asset managers hope they can replace the outflows with a new surge from millennials or other products, such as individual retirement accounts. One industry data provider said most funds leaving 401(k)-style plans are migrating to IRAs.
(You can see the whole WSJ article behind the paywall by doing a google search on its title, "Money Flows Out of 401(k) Plans as Baby Boomers Age" and clicking on the first result.)

I bolded the part that also reflects what happened to DH's 401(k)--it's now an IRA all at Vanguard. The WSJ article looks like it is about how money managers will handle this migration and what current managers of 401(k) plans face, more than how the markets are being affected, it seems to me.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 06-17-2015, 09:42 AM   #7
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,099
this isn't surprising - there are a crap ton of people retiring right now - it's simple demographics combined with the economy and ACA


now, what about investment earnings on the balances?

I bet inv earnings + contributions are greater than withdrawals, in aggregate
__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 06-17-2015, 09:44 AM   #8
Thinks s/he gets paid by the post
Big_Hitter's Avatar
 
Join Date: May 2013
Location: In the fairway
Posts: 4,099
Quote:
Originally Posted by old woman View Post
I rolled all mine to a IRA the minute I retired does that count as a withdrawal?
yarp
__________________
Swing hard, look up
Big_Hitter is offline   Reply With Quote
Old 06-17-2015, 10:38 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 3,708
Quote:
Originally Posted by FIREd_2015 View Post
Interesting article in WSJ today (subscription needed)
If you "paint" (highlight) the title of a WSJ article (and most other subscription reports), then right click, you'll see "search [article title] on Google". Click that and you can read the entire article.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 06-17-2015, 01:48 PM   #10
Recycles dryer sheets
 
Join Date: May 2015
Location: NorCal
Posts: 74
Quote:
Originally Posted by ERD50 View Post
The Times article doesn't give numbers, just adjectives. Just how big of an imbalance is this? Did it go from (IN-OUT)/(TOTAL OF ALL 401K VALUE) of some very small positive number to some very small negative number?

Does it have enough to affect the market? Or is it just a headline?

-ERD50
Quote:
Originally Posted by ERD50 View Post
The Times article doesn't give numbers, just adjectives. Just how big of an imbalance is this? Did it go from (IN-OUT)/(TOTAL OF ALL 401K VALUE) of some very small positive number to some very small negative number?

Does it have enough to affect the market? Or is it just a headline?

-ERD50
For those that aren't able to view the article, the WSJ article showed a bar chart for 2010-2013 but didn't include the actual number except for 2013. So based on my interpretation of graph:

2010 net inflow of ~ $16 billion
2011 net inflow of ~ $25 billion
2012 net inflow of ~ $11 billion
2013 net outflow of $11.4 billion
__________________

__________________
FIREd_2015 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
The Tipping Point MDJO Other topics 15 09-28-2012 07:59 PM
What Happens if You Exceed $16,500 in 401K? John Galt III FIRE and Money 28 12-23-2011 09:01 PM
What do you think is the gasoline price tipping point? Or is there one? newguy88 FIRE and Money 11 11-07-2007 05:12 PM
Book reports: "Blink" & "Tipping Point" Nords Other topics 2 12-04-2005 05:15 PM
The tipping point: When to get out Traveler Other topics 29 05-05-2004 06:22 PM

 

 
All times are GMT -6. The time now is 02:22 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.