Gen Y Saving More for Retirement
Many young people are double-dipping when it comes to retirement accounts—and that’s a good thing. A new survey from TD Ameritrade found that one in four 20-somethings funnel money into not one, but two different types of retirement accounts, a 401(k) or 403(b) as well as an IRA.
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But the news isn’t all good, especially for older Americans. The survey also found that just 16 percent of baby boomers are putting money into both types of retirement accounts, and fewer than one in three boomers are making “catch-up” contributions, or contributing an additional $5,500 into employer-sponsored accounts.
Meanwhile, many Americans seem to be looking for other ways to tighten their budgets. Among the survey’s findings:
63 percent of respondents said they automate savings into a savings or investment account each month.
62 percent said they stick to a budget.
83 percent said they track household expenses.
About half of baby boomers say they are “somewhat confident” they will meet their retirement savings goals.
Four in 10 Americans check in on their retirement accounts at least once a month.
About half of respondents said they want to save at least $500,000 for retirement; 23 percent aim to save $1 million or more.
The survey reinforces previous findings that suggest the recession has had a positive impact on 20-somethings’ personal finance habits. An investment survey released by TD Ameritrade last year found that four in 10 Gen Y-ers are watching the markets and their portfolios more carefully post-recession, compared to just three in 10 Gen X-ers, who are currently in their 30s and 40s.
Meanwhile, one in three members of Gen Y invested new money in the stock market recently, compared with just 14 percent of Generation X and 15 percent of baby boomers. Gen Y investors report that they are mostly on or ahead of schedule with their emergency funds and retirement savings, the survey found.