Fewer Americans are blowing their retirement savings on cars,televisions and electronics when they quit their jobs. Most workerswho choose to take a lump-sum distribution from their retirementplan roll it into an IRA or other savings vehicle or use that moneyto pay down debt or buy a house.

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Only a small percentage of workers—7.5 percent—spent their lumpsum retirement savings on mindless consumption when they left theirjob in 2012, according to the Employee Benefit Research Institute.That’s a major improvement from years past. In 1993, for instance,22.7 percent of those who received a distribution blew the money onnonessentials. That figure dropped to 15.1 percent through2003.

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The number of workers who roll their accounts into tax-qualifiedsavings accounts has increased sharply since 1993, according toEBRI, with 45.2 percent of those receiving a distribution through2012 doing so.

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Also read:

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Older DC plan participants interested in guaranteed incomeoptions

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From 2010 to 2012, the average account balance that was paid outin a lump-sum distribution was $15,934. The median amount was$10,000. Most lump-sum payouts were small, with 4.6 percent ofrecipients reporting a distribution of less than $500; 3.4 percentreporting less than $1,000; and 10.1 percent reporting between$1,000 and $2,500. Only 27.4 percent were more than $37,500. Thebulk were between $2,500 and $37,499, EBRI found.

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More than 56 percent of the distributions in the study tookplace after 2003 and half of those taking distributions were 40years old or younger.

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