Getting smarter...?

Americans seem to be getting a little smarter about handling their retirement savings, but we still have a ways to go according to a new report by the Employee Benefit Research Institute.

Slightly more than 43% of those who received a distribution from an employer's qualified plan in 2003 rolled the money into an IRA or another employer's plan, thus avoiding the immediate tax bite and penalty. This is way up from the 19% who did so ten years earlier in 1993.

It's likely that people understand the rules better now than in the past or perhaps financial institutions have done a better job marketing rollover products.

It's a big improvement but it's still pretty dismal. Too many people are cashing out lump sums and paying unnecessary taxes.