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MANY EMPLOYEES SQUANDER PAYOUTS FROM THEIR PENSIONS

Cast yourself as starring in this mini-drama: You've just switched companies for a more impressive title and a fatter paycheck. Just as you walk out the door of your old office, your ex-employer hands you a check for the retirement benefits you accumulated over the years.

What will you do with the money? Roll it over into your new employer's retirement plan or into an Individual Retirement Account? Or heed the whispers of the little fellow in red brandishing a pitchfork over your shoulder?

If you are like 34 percent of lump-sum recipients, you'll probably spend all of the cash, according to a new study by the Employee Benefit Research Institute (EBRI), a Washington, D.C., think tank.

Joseph Placentini, a research associate at the institute, reviewed United States Census Bureau data on 8.5 million workers who had received more than $48 billion in such pension payouts as of May 1988.

He found that they were three times as likely to spend all the money as to keep all of it in a tax-deferred account: 11 percent rolled over their entire lump sums into new retirement plans, while 34 percent spent the cash -- on such things as new cars, education expenses and vacations -- even though they had to pay income tax on the distributions.

In addition, with a few rare exceptions, people under age 59 1/2 who took their payouts after 1986 had to pay 10 percent tax penalties on top of ordinary income taxes.

The remaining 55 percent of the people who got lump sums saved or invested part of their money and spent the rest, or saved the money in taxable accounts.

Lump-sum spenders may eventually regret their shopping sprees.

According to the institute, the average job-hopper stands to lose as much as 46 percent of his potential pension income by squandering a payout rather than saving it for retirement.

Placentini figures that someone 25 to 34 years old who rolls over $4,100 into a growth-stock IRA could quadruple it by age 65.

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