When you switch jobs, the basic advice is to roll over your old employer-sponsored retirement account to an individual retirement account, or IRA. Sounds easy, but beware.
I know because I’ve done this a few times. And have learned to keep it simple.
My method: I divvy my rollover up between a handful of low-fee index funds. I have also carved out a portion for a target-date fund, a “set-it-and-forget-it” way to invest based on the date of retirement. (As you age, the fund shifts the account’s investments from stocks to less volatile choices, such as cash and bonds.)
But guess what?
That’s not what many people do, according to recent research from Vanguard Group. Instead, their money is transferred from a former employer’s 401(k) plan to an IRA, usually at another financial services firm, and the balance goes into a market-type cash account that generally pays a marginal rate of interest.
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Nearly a third of those who rolled retirement savings into IRAs at Vanguard in 2015 still had the balance sitting in cash seven years later. Not cool. You lose years of potential gains from being invested in stocks, which compound and boost your wealth for your golden years.
John Bogle: the late founder of the Vanguard Group was an index fund evangelist. (AP Photo/Mark Lennihan) (ASSOCIATED PRESS)
We’re not talking about chump change here. For investors under age 55, the estimated long-term benefit of investing in a target-date fund (versus staying in cash) upon rollover is equivalent to, on average, an increase of at least $130,000 in retirement wealth at age 65, according to Vanguard.
“How many people stayed in cash and for how long far exceeded our expectations,” Andy Reed, Vanguard’s head of investor behavior research and co-author of the study, told me.
Most older investors, however — and/or those with balances exceeding $100,000 — moved out of cash within the first few months after the rollover. Compared to men, women, however, were significantly more likely to remain in cash for years after the rollover.
Read more: What is the retirement age for Social Security, 401(k), and IRA withdrawals?
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There are several ways to handle retirement savings when leaving jobs. You can keep your 401(k) balance with your old company, roll the money into a new employer’s 401(k) plan, or move it into an IRA.
The downside to keeping retirement money at a former employer, of course, is that you can’t add any more money to it. And you’re stuck investing only in that specific menu of investments. An IRA will typically offer many more choices.
How it works
When you roll your 401(k) account into an IRA, the company that administers the plan typically liquidates your holdings, then moves the cash into your IRA. But, it doesn’t automatically invest it for you. “We often see people assume their IRA cash will be auto-invested, similar to a workplace plan such as a 401(k),” Rita Assaf, vice president of retirement products at Fidelity Investments, told Yahoo Finance.
Put it down to confusion, “not necessarily about investing, but with the mechanics of IRAs,” Reed of Vanguard said. “It’s not that people intentionally want to make this money mistake. This is not deliberate and part of a master plan. It’s out of sight, out of mind.”
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‘No idea’
In another survey of over 500 Vanguard IRA clients who completed a rollover in 2023 but were still in cash in June, about two-thirds had no idea how their IRA money was invested.
The remainder said they never got around to investing it, or they didn’t want to risk putting their savings into stocks, or they simply felt overwhelmed by their IRA choices. Reed said: “You can have too much of a good thing when it comes to choice.”
Given all the job changing across all generations in recent years, this mistake is pretty significant, particularly for younger workers. “If you want to have any chance of retiring and living the life you want in retirement, then you’re going to have to have a large portion of your retirement savings allocated to equities to maximize your chance of success,” Reed said.
Have a question about about retirement? Personal finances? Anything career-related? Click here to send Kerry Hannon a note.
Targets to the rescue
To improve retirement outcomes, you need to stay invested consistently.
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One solution: Make it possible for financial services firms to invest rollovers to IRA accounts automatically into a target-date fund or something akin to how many employers now enroll workers automatically into these diversified accounts when they come on board.
Virtually all 401(k) plan sponsors and the majority of state auto-IRA programs use target-date funds when they automatically enroll workers in a retirement plan. Track record: not bad. Vanguard’s Target Retirement Fund 2050 is up 11.4% to date and 10.1% over the past five years.
Rolling over an IRA? Your best move is to have a plan, says T. Rowe Price. (Photo: Getty Creative) (PIKSEL via Getty Images)
This way you don’t have to know what an index fund or the other nitty-gritty of investment lingo.
Until the laws are changed, your best move is to have a plan for how you want your savings invested before you initiate a rollover, said Lindsay Theodore, a senior manager in advisory services at T. Rowe Price.
Call the firm where you’re moving your money to and get an idea of what would be an appropriate investment, she added. “Having a good understanding up front as to what that process is going to look like can help you get your money invested right away, so it doesn’t get stuck in a cash limbo.”
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Kerry Hannon is a Senior Columnist at Yahoo Finance. She is a career and retirement strategist, and the author of 14 books, including “In Control at 50+: How to Succeed in The New World of Work” and “Never Too Old To Get Rich.” Follow her on X @kerryhannon.
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While most AI in financial services remains advisory, LUMIQ has built the layer that owns the decision — autonomous, auditable AI agents making regulated calls in production at leading banks, insurers, and capital markets firms. Today, LUMIQ serves clients across India, the United States, and Southeast Asia — leading institutions across insurance, banking, and capital markets.
NEW YORK and SINGAPORE, June 19, 2026 /PRNewswire/ — LUMIQ, an AI-native financial services company, today announced a strategic funding round to scale auto-decisioning for financial institutions across the United States and Southeast Asia. The round was led by Bajaj Finserv, one of India’s largest and most diversified financial services groups, with participation from existing investor Info Edge Ventures.
LUMIQ raises Strategic Funding to become AI decision layer for financial services
Right now, thousands of customers are waiting for a policy to be issued, a loan to be disbursed, a claim to be adjudicated, because somewhere an FSI employee is drowning in decisions, held back by the risk of getting it wrong. Today, when e-commerce delivers the same day, banks and insurers still decide in weeks. We built LiteCone to take that burden: AI decides the routine cases, completely and accountably, so humans spend their judgment on the one case that actually needs it. This round lets us bring that to every financial institution in the markets that matter most. Shoaib Mohammad, Co-founder and CEO, LUMIQ
From AI that assists to AI that decides
For decades, financial institutions have bought technology that made their people faster — faster data, faster scoring, faster copilots. The decision still landed on a human. LUMIQ is changing that. Through its LiteCone platform, the company deploys AI agents that read the file, apply the institution’s own guidelines, and reach the decision end to end — escalating only the cases that genuinely require human judgment. The output is not a recommendation. It is a decision, with full reasoning attached, cross-referenced to policy, and defensible under audit.
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The results in production speak clearly. At a leading life insurer, LUMIQ’s LEO agent decides 75–80% of underwriting cases with zero human touch, reduced policy issuance cost by roughly 25%, and compressed turnaround from days to under eight minutes — running 24×7 with complete auditability. Across its client base spanning insurance, banking, and capital markets in India, the US, and Southeast Asia, LUMIQ now processes millions of decisions annually.
LiteCone turns a real financial-services role into a working AI agent in weeks. Every agent we deploy is consistent, explainable, compliant, and auditable by design — not as an afterthought. This capital lets us go deeper on the platform and broader across roles. And through our cloud and AI lab partnerships, institutions will increasingly find LiteCone already embedded in the platforms they run today. Vaibhav Dobriyal, Co-founder and Chief Product Officer, LUMIQ
This round funds four priorities: expanding go-to-market in the US and Southeast Asia; deepening LiteCone’s decisioning capabilities; extending the agent workforce across more financial-services roles; and building a partnership ecosystem with cloud hyperscalers, AI labs, and core banking and insurance platforms so LiteCone is embedded where institutions already run.
LUMIQ’s investors backed the round for the same reason its customers adopt LiteCone: agents already deciding in production, with auditability and control built in.
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As a financial-services group, we know how much rests on getting regulated decisions right, at speed and at scale. LUMIQ has built AI agents that decide in production with auditability and control built in, the capability the industry has been moving toward. We are proud to lead this round and to support the team’s expansion across the US and Southeast Asia. Lakshmi Iyer, Group President – Investments & CEO, Bajaj Alternates
Our conviction is grounded in what LUMIQ has already built. Their AI agents aren’t just built for the future. They are operating in production today, at speed. This combination is rare, and its value will only compound as the company scales globally. Girish Jhunjhunwala, Fund Manager – PE and VC Investments, Bajaj Alternates
Financial services is one of the hardest categories to crack — regulated, risk-averse, and unforgiving of hype. LUMIQ has put agentic AI into live financial-services workflows and earned the trust of large institutions across the US, Southeast Asia and India. That is how a category-defining company in financial-services AI gets built, and we are proud to keep backing the team as they scale globally. Kitty Agarwal, Partner, Info Edge Ventures
LUMIQ’s goal is to lead one category: auto-decisioning at production scale for financial services. Agents that act, not assist, and never compromise audit, compliance, or predictability.
About LUMIQ LUMIQ is an AI-native financial services company. Through its LiteCone platform and a growing workforce of production AI agents, LUMIQ turns real financial-services roles — insurance underwriter, credit underwriter, claims adjudicator — into agents that are consistent, explainable, compliant, and auditable. The company pairs deep domain expertise across banking, insurance, and capital markets with frontier AI. LUMIQ employs over 350 AI and data specialists, and has offices in New Jersey, Singapore, and Delhi NCR (India).
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Web: www.lumiq.ai
Cision
View original content:https://www.prnewswire.com/apac/news-releases/lumiq-raises-strategic-funding-to-become-the-ai-decision-layer-for-financial-services-302805280.html
Consumer confidence has plunged among traditionally optimistic younger adults amid fears for their personal finances and the wider economy, figures show.
GfK’s long-running Consumer Confidence Index remained unchanged at an overall score of minus 23 in June.
However, the analyst said this was was “misleading as, beneath the surface, there are new signs that confidence is weakening”.
Source: GfK
Neil Bellamy, consumer insights director at GfK, said: “The biggest fall this month is among those aged 16 to 29, traditionally one of the most optimistic groups.
“Here confidence has dropped 11 points over the past month to minus two, the lowest level seen for two years, driven by large falls in views on both their own personal finances and the wider economy.
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“More broadly, there are now no demographic groups with a positive confidence score, including higher-income households earning £50,000 or more, who have slipped back into negative territory as of June.
“Confidence remains subdued and vulnerable to further economic or political uncertainty.”
Sourve: GfK
Overall, confidence in personal finances over the coming year remained flat at minus two, four points lower than this time last year.
The measures of both personal finances and the economy over the previous 12 months were both slightly down, by two points and three points respectively, “reflecting the sense that things have been extremely tough over the last year for so many”, GfK said.
The only measure to increase was expectations for the wider economy over the next 12 months, up two points to minus 36 but still eight points below this time last year.
The major purchase index, an indicator of confidence in buying big ticket items, remained at minus 20, four points lower than June last year.
“Ships of the World, start your engines. Let the oil flow!” said Donald Trump on social media after he announced the signing of an interim peace deal with Iran on Sunday. Under the agreement – which Iran acknowledged included a 60-day negotiating period for a final deal – the president said that following retrieval of mines, there would be a “toll free opening” of the Strait of Hormuz.
But many of the finer details remain “unclear”, said The Guardian. There are questions over the “exact timing of the reopening of the maritime route, who will oversee safe passage and whether any conditions will be applied”.
Financial markets have welcomed the announcement, but further volatility could yet hit people’s pockets.
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Have oil prices changed?
The price of oil fell to about $83 (£62) per barrel following Sunday’s announcement, its “lowest since the early days of the war”. Then on Tuesday it dipped below $80. In February, before the first missiles struck Iran, each barrel cost around $73. The price peaked at around $120 at the height of the conflict.
Prices are expected to fall in the wake of a prolonged ceasefire, and there are “real grounds for optimism”, said Politico. Damage to oil-specific infrastructure has been “limited”, meaning it could take “as little as six weeks to resume outflows”.
“So that’s the energy crisis sorted, right?” Not so fast.” A combination of damage to wider infrastructure and the continued closure of the Strait of Hormuz has meant roughly 12 million fewer barrels of oil have been produced each day. And they “won’t magically reappear on the market even if the pact holds”.
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Will this continue?
The “first big test” of the deal will be whether shipping companies will have enough “confidence” to return the use of the strait to pre-war levels, said The New York Times. If successful, this will free the 250 tankers and 330 cargo ships trapped in the Gulf, according to the BBC, and transport oil around the world. Oil and gas producers in the Gulf nations would then need to re-establish “wells, refineries and other infrastructure”.
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Even if all of that were to materialise, European and Asian countries who have historically depended on oil from the region “will face a long wait”. Processing oil takes considerable time. “It is unlikely that the prices of gasoline, diesel and other fuels will return to pre-war levels anytime soon.”
What about inflation?
Despite air fares “surging” and fuel costs “tipping higher”, UK inflation remained at 2.8% in May, said The Independent. This was a “surprise” to economists, who had widely predicted a rise to 3% and “perhaps even beyond” due in part to the war in Iran.
Remaining at this level could imply that the “cost-of-living squeeze will not play out as badly as had been anticipated” earlier this year, even if the “Iran war sent energy costs spiralling”. However, prices are set to rise again later in 2026, leaving savers to make sure their investments are earning an interest rate “well above the rate of inflation”.
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What does this mean for consumers?
Food prices in the UK look to be rising more slowly. Should the Strait of Hormuz open freely, fertiliser, which has “soared in costs” and put pressure on farmers, could fall substantially, said the BBC. Jet fuel has already seen a “small fall in price”, with Northwest Europe jet fuel trading at $1,033 (£780) per tonne, compared with $831 pre-conflict and around $1,840 at its peak.
How will businesses be affected?
Beneath the “encouraging headlines” about inflation control, there is a “hidden crisis for businesses”, said The Telegraph. The Iran war triggered one of the largest energy shocks in history, meaning businesses were “swallowing soaring costs to spare shoppers”.
“Input rises” for producers climbed by “8.7% year on year in May”, larger than the 7.9% in April and the highest in more than three years. On the bright side, this means the economy may avoid a dreaded “wage-price spiral”, but conversely lower margins could lead to increased pressure on the employment market.
