Tag Archives: financial
The world is aging, and the life expectancy is increasing. The number of older persons has tripled over the last 50 years and it will more than triple again over the next 50 years. More older people and longer life expectancy will lead to more demand for retirement savings. According to the article written by Stephen Miller, CEBS, the average 401(k) balance in plans administered in the U.S. by Fidelity Investments reached a record high of $77,300 at the end of 2012, up from $69,100 one year earlier-an increase of 12 percent. About two-thirds of the 2012 increase was attributable to market action, and one-third was due to participant contributions. Fidelity Investments is one of the largest plan service providers.
Another study conducted by research firm, LIMRA, indicated that Generation X workers (born 1965-1980) have contributed to their current employer’s defined contribution plan for nine years, accumulating nearly $70,000 (January, 2013). On the other hand, Generation Y workers (born 1980-2000) have contributed to their current employer’s defined contribution plan for four years, accumulating slightly less than $26,000. According to Cecilia Shiner, senior analyst, LIMRA Retirement Research, while there are a lot of attentions on the Baby Boomers (78 million), nearly 116 million Americans (aged 20-47) need help on how to plan and save for retirement. As quoted from Cecilia Shiner:
Most Gen X and Y Americans will have to rely solely on their savings to fund their retirement, yet few are taking full advantage of the retirement savings vehicles available to them.
The study further suggests that if financial literacy could be improved for these consumers, the likelihood of participating in their employers’ plans may rise.