Money Flows Out of 401(k) Plans as Baby Boomers Age

This article in the Wall Street Journal presents an interesting take on 401(k) plan outflows. Usually, you read about investors taking money out of funds due to general market fears after extreme market volatility. This article points out that folks are distributing investable assets out of 401(k) plans relative to their contributions because the baby boomers are tipping the balance and beginning to retire. This really brings to light the next phase of investment challenges this group of investors will face –  Retirement Income Planning.


In short, while you are accumulating assets, the name of the game is to maximize your expected return for a given level of expected risk. This manifests itself within an investment strategy as a diversified multiple asset class portfolio.

When you are taking portfolio distributions however, you want to maximize your expected return for a given level of income. This approach presents a new set of challenges (e.g., market sequence and longevity risk) and it will be interesting to see how they are addressed in the future.


McLean Asset Management Corporation (MAMC) is a SEC registered investment adviser. The content of this publication reflects the views of McLean Asset Management Corporation (MAMC) and sources deemed by MAMC to be reliable. There are many different interpretations of investment statistics and many different ideas about how to best use them. Past performance is not indicative of future performance. The information provided is for educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy or sell securities. There are no warranties, expressed or implied, as to accuracy, completeness, or results obtained from any information on this presentation. Indexes are not available for direct investment. All investments involve risk.

The information throughout this presentation, whether stock quotes, charts, articles, or any other statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe to be reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in the transmission there of to the user. MAMC only transacts business in states where it is properly registered, or excluded or exempted from registration requirements. It does not provide tax, legal, or accounting advice. The information contained in this presentation does not take into account your particular investment objectives, financial situation, or needs, and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions.