Gen Yers are better savers than boomers
More members of Generation Y are taking advantage of both IRAs and 401k's to sock away money for retirement.
This post comes from Matt Brownell at partner site MainStreet.
When it comes to socking away money for retirement, young Americans are putting their parents and grandparents to shame.
That's the conclusion of a survey by brokerage firm TD Ameritrade, which asked Americans young and old what they are doing to fund their retirement. The good news is that most of us are at least saving something for retirement: A solid 85% of Americans have either a 401k or an IRA, and 36% have both.
But when it comes to actually taking advantage of the full range of retirement options out there, there's a big generational divide at work -- and for once it's young Americans who are proving to be more responsible than their elders. Just 16% of working baby boomers are funding both an IRA and a 401k, compared with 25% of members of Generation Y and 23% of Gen Xers. "Mature" Americans (defined as those born between 1930 and 1945) fared even worse, with just 9% saying they funded both accounts. Post continues below.
Because the question was asked of Americans who are currently working, retired boomers weren't included, to avoid skewing the results. And more importantly, it's definitely not a matter of older Americans simply feeling that they've reached their retirement saving goals: The same survey found that 74% of boomers were not entirely confident that they've saved enough for retirement.
Boomers do have one very potent tool for closing the savings gap and putting themselves on pace for a more comfortable retirement: the "catch-up" contribution, which allows people older than 50 to contribute an additional $5,500 a year to their 401k beyond the annual limit of $16,500.
But the TD Ameritrade survey found that this option is woefully underutilized: 68% of boomers said they were not taking advantage of the opportunity. Of that group, half said they couldn't afford the additional savings, while 21% admitted they simply hadn't heard of it.
The survey was conducted via phone interviews over the summer with more than 1,500 Americans.
More on MainStreet and MSN Money:
Few Gen-Y kids have pensions. They'd better be saving more, because you have to save a ton of money to equal the guaranteed monthly payment of a pension plan.
It's too bad that companies stopped offering pensions. When I was young, we were told that retirement income was a three legged stool-pension, savings and SS. Today, it's a two legged stool- 401k, or its equivalent and SS. Kids need to be saving more than we did, simply because the stool isn't balancing anymore.
First the corporations and the Republican party brought in millions of illegal aliens for the cheap labor and to bring wages down, then they got Republican Reagan to give them all amnesty. Unsatisfied with that they kept wages down to the point were now Both parents must work to make ends meet. Still not satisfied they cut taxes on the Corporations and the wealthy and paid for two wars by fleecing the middle class. Still not satisfied they de-regulated the financial sector so that the corporate crooks could get to all those middle class 401ks and loot them. Still not satisfied they bring in millions of H1-b visa professionals to take jobs from real Americans under the pretext that they can not find qualified Americans. Still not satisfied they brought the country and the middle class to its knees and destroyed the life savings of many average Americans while giving bailouts and bonuses for failure to the wealthy.
The Republican party and its masters will not be satisfied until every middle class person is a slave who works until he drops or has to die once he gets sick since he will not be able to afford healthcare. I am only 13 but even I can see what these un-American corporations and the Anti-Real-American Republican party is doing.
How can you blame the young generation in my grandpa and great grand pa's days they went off to war and many ofthem died other came back and got married and found jobs.
How can adults today top that?
become millionares?
bring on world peace?
That is crazy because the army is turning people away and job are becomming more specialized that an 18 yearold has a harder time catcing up/getting promoted, the best thing for someone to do at the 16-30 range is get a job or couple of jobs and/or go to school to get a skill or trade.
It doesnt really get any better to just live a honest life and take care of your familes and friends
People that can talk bad openly about the young generation cleary hasnt met anyone real that is from the young generation.
You took the words right out of my mouth, pablacita.
Add to that the fact their parents, and grandparents, had it quite a bit tougher than they did. Most people, in the babyboomer class, had to pay for their own education; and many of the Gen Y group have parents to thank for that. And as slow train said, it's a bit hard to hang onto that investment in the future when you're being sold down the river.
At least a few people here have their eyes wide open.
Many of the so called "boomers" only made enough money to pay the bills - nothing left over for savings or investments.
And if - Gen Y is putting away money for retirement - it is only those who actually can get those jobs paying enough to do so. Those who are out of work are certainly not saving anything.
Anyone wonder - if the guys who did the survey know that a huge majority of Americans are working at low wage service jobs - They certainly are NOT saving anything.
Many don't buy into this articles survey results.
They can save more because they make so much more. A top Chemical Engineering graduate in 1962 was offered a salary of $6000/year...about 12 years later, lesser qualified engineers earned $60,000 to $75,000 per year. It is tough on those of us who are Seniors on fixed income, Social Security, and Pensions, even with late retirements. We had a dual career marriage, progressive growth at work, two daughters unique and talented, raised right, and put through fine universities, but we struggle even with savings habits akin to our parents of the "greatest generation." Inflation has increased, the Federal Government's formula for inflation is far from correct, and the Obama offered Social Security increase almost became a deficit because of the new add-ins. We need a fair balanced accross the board increase...as President Bush recognized. Let's hope the 2012 election brings us a good, and new Presidential Team, and Congress...who can restore America for Americans!
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