Almost half of Americans are not contributing to any retirement plan, according to a new survey.
Of respondents between the ages of 18 and 34, 56 percent were not saving, compared to 49 percent of all those surveyed. The research, conducted by LIMRA, did find that younger workers and those with higher incomes were more likely to be thinking about contributing to an IRA in the next year, however.
"It was especially troubling to see that a larger portion of younger Americans – who are less likely to have a defined benefit plan – are not saving for retirement in IRAs or defined contribution plans," said Matthew Drinkwater, associate managing director of LIMRA Retirement Research. "In order to have the adequate savings necessary to meet their financial needs in retirement, which could last 20 or more years, it is critical that these individuals begin saving systematically early in their working years."
Aside from failing to save, the report also indicates many Americans have incomplete or incorrect knowledge about IRAs, which may be hindering their financial planning. Companies which offer 401(k) or other retirement options may wish to enhance the education efforts of their employee benefit plan administration in order to help workers plan more effectively and make informed choices.
