Americans Rev Up Their Retirement Contributions
In theory, most of us would like to save more for retirement. But new research shows that Americans are making that dream a reality.
People are contributing more than ever to Individual Retirement Accounts (IRAs), according to a recent Fidelity Investments study.
On average, contributions to IRAs jumped 5.7% in 2013, with contributions averaging $4,150—a new record. Total balances increased 10% from 2012, to $89,100.
The pleasantly surprising part? It’s not just older people who are boosting their savings. IRA contributions are up 3.9%, 6.7% and 6.2% for people in their 20s, 30s and 40s, respectively. That’s despite the fact that younger people tend to be more fiscally conservative than older generations, and prefer keeping their money in cash.
At the same time, Ken Hevert, vice president at Fidelity Investments, told USA Today that many people find it difficult to prioritize a long-term goal over present-day needs. Starting a family or purchasing a home can easily become obstacles to saving for retirement.
When Americans do contribute to their retirement accounts, though, they can benefit from an employer match. According to a study by TIAA-CREF, 78% of Americans get matching contributions from their work (if they’re on an employer-sponsored plan). At this point, only about 77% of eligible employees contribute sufficiently to take advantage of their full employer match.