401(k) news headline in center of torn dollar bill

More than half of retirees still kept their money in their workplace savings plans a year after leaving, according to a review of its customers by Fidelity Investments.

And more employers are realizing that's a good thing. More assets in a plan gives employers more leverage to command lower fees, for one thing.

There's also a growing recognition that better retirement plans _ sufficient company matches, as well as ample low-cost investment options and advice _ translates into employees who retire when the time is right personally rather than hanging around just to collect a paycheck.

"Employers say they want to make sure their plan allows workers to retire with confidence, and they're rightly feeling a sense of fiduciary duty around that," said Dave Gray, head of Fidelity's workplace retirement offerings.

(Of course, there's a murky area here around age discrimination. Some observers worry that, ultimately, employers' motivation here is really about incentivizing older workers to leave. But that's a column for another day.)

The investment giant is rolling out website tools that will handle regular withdrawals from 401(k) plans that are designed to keep the accounts from being depleted during a retiree's life. The company is also offering a set of mutual funds, similar to target-date funds that are often used in plans for pre-retirement savers, that are invested to accommodate liquidations.

Ever since baby boomers began to approach retirement more than a decade ago, and as traditional pensions melted away, investment firms have been trying to help investors save on their own for retirement. Until the last several years, however, few offered tangible products aimed at cracking open the nest egg safely.

A couple of exceptions: The investment firm Blackrock did put significant resources into developing a spending tool several years ago that would take into account current interest rates and other economic factors to arrive at a safe withdrawal rate that savers could use each year. Check out the Lifepath Spending Tool at https://www.blackrock.com/tools/life-path-spending. T.Rowe Price offers an income calculator at https://www.troweprice.com/ric

It's important to understand the underlying investments in these plans, however.

Turning a 401(k) balance into a monthly paycheck sounds cool, but a withdrawal strategy is not a contractual guarantee that those paychecks will keep coming for life.

Annuities offer pooled mortality credits and insurers use those to back their promises of lifetime payments.

Neither strategy is perfect. Insurers could miscalculate their risk and default, though there are government backstops for that. And stocks and bonds could go into a deep bear market for many years, compromising any withdrawal strategy designed to smooth income flows.

One answer is to do both. Some experts recommend purchasing an annuity to cover whatever basic retirement expenses aren't covered by Social Security, and investing the rest in a broad, low-cost portfolio.

Wherever you settle, the point is to actually have a plan of some kind rather than blindly taking retirement plan withdrawals to cover this month's bills.

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