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Managing Your Retirement Funds Can Be Tricky

USA Today, 1/17/08

Abstract:

Working 26 years in the coal mines allowed Jim Foster to save $500,000 for retirement. But when Foster retires this year, his financial work will have just begun. Now he'll have to manage that lump sum.

Foster, of Gillette, Wyo., is part of the steam-rolling generation of 79 million baby boomers, the eldest of whom turn 62 this year, who must decide what to do with retirement payouts that will usually come in one big chunk.

Their parents and grandparents mostly relied on traditional pensions that paid them a lifetime stream of income. Boomers, by contrast, are the first generation whose principal retirement assets will come in lump sums from 401(k)-type plans.

Few have managed such enormous funds before. Yet, they'll have to make investment decisions that will determine their financial security in a retirement that could stretch for decades, the longest retirements any generations has yet experienced. The risks are high. They could succumb to unwise investments. Worse, they could fall prey to unscrupulous advisers who exploit financial naivete.

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