Red lights illuminate Pennsylvania Avenue as the U.S. Capitol glows in the twilight, in Washington, Wednesday, Dec. 19, 2012, as talks continue on the looming fiscal cliff. (AP Photo/Jacquelyn Martin)
WASHINGTON (AP) -- A congressional watchdog agency says many workers get false or misleading information about what they can do with their 401(k) accounts when they change jobs.
The Government Accountability Office found that financial firms often encourage workers to roll over a 401(k) into an individual retirement account, or IRA, even when that might not be the best option.
Workers also have the option of leaving retirement funds in the previous employer's plan or moving funds to a new employer's 401(k).
The GAO report says the guidance workers receive is either too complex or too general, leaving them vulnerable to financial firms that may try to steer them toward IRAs that have higher fees. Democratic lawmakers say the report shows a need for stronger consumer protections in the growing 401(k) rollover market.