The Gen X and Gen Y generations are saving more rigorously for their retirement years than are their mature grandparents or boomer parents.
That's according to a new survey from TD Ameritrade, a stock brokerage company in Omaha, Neb.
Eighty-five percent of those surveyed said they have an Individual Retirement Account, or IRA, 401(k) or 403(b) retirement savings plan. Thirty-six percent said they have both an IRA and 401(k) or 403(b) plan. That suggests a majority of working Americans have grasped the basic concepts and responsibilities of retirement savings.
But 25 percent of Gen Y, born 1977-1989, and 23 percent of Gen X, born 1965-1976, said they were funding both their IRA and 401(k) or 403(b) plan, a commitment not matched by boomers, born 1946-1964, at 16 percent, or matures, born 1930-1945, at 9 percent.
More than 70 percent of boomers said they weren't completely confident they would reach their savings goals by the time they're ready to retire.
Carrie Braxdale, managing director of investor services at TD Ameritrade, said in a statement many working people, especially those who are young, are taking advantage of opportunities to save for retirement despite a tough economy. But Braxdale added that funding these accounts on a regular basis is crucial, even if the deposits are only small amounts.
"Every year that you don't fund your IRA is a lost opportunity for tax deferral to help with growth," Braxdale said.
Boomers also are missing out on catch-up contributions, which allow many of them to contribute an additional $5,500 to an employer-sponsored retirement plan. Half of the 68 percent who said they weren't making catch-up contributions said they couldn't afford to save that much. Twenty-one percent said they'd never heard of catch-up contributions.
"We encourage investors of all ages to have a candid discussion with their broker or financial adviser about opportunities, like catch-up contributions, that might make sense for their retirement saving and investing plans," Braxdale said.
The telephone survey of 1,509 adults was conducted by Maritz Inc., a sales and marketing services company in St. Louis. Among the respondents, 854 said they were working full- or part-time.
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