Members of Generation Y are managing to save for retirement more conscientiously than Boomers, according to a new survey.
The survey, by TD Ameritrade, found that members of both Generations X and Y are doing more to save for retirement than their parents and grandparents. The survey found, though, that across the generations, more people are putting away money for retirement: 85 percent of the respondents have an Individual Retirement Account and/or a 401(k)/403(b) plan, while 36 percent have both. But the younger generation of workers are apparently more diligent at saving for retirement: 25 percent of Gen Y and 23 percent of Gen X are funding both their 401(k)/403(b) plans and their IRAs, compared to 16 percent of Boomers and 9 percent of Matures. The survey defines Mature as those born between 1930 and 1945, Boomer as those born between 1946 and 1964, Gen X as those born between 1965 and 1976, and Gen Y as born between 1977 and 1989.
However, the survey found that 74 percent of Boomers are not completely confident that they will reach their savings goals by the time they are ready to retire.
“The good news is that many working Americans, especially those who are young, are taking advantage of saving for retirement in a tax-free environment through options like an IRA, despite a tough economy,” said TD Ameritrade managing director of investor services Carrie Braxdale in a statement. “But funding these accounts on a regular basis is the key—even if it’s a small amount. Every year that you don't fund your IRA is lost opportunity for tax deferral to help with growth.”
Many Boomers are also missing out on another chance to bolster their retirement savings. Among the 50+ crowd, 68 percent of those eligible are not taking advantage of the opportunity for a “catch-up contribution,” a feature allowing them to contribute an additional $5,500 to an employer-sponsored retirement plan. Half of them said they are skipping it because they can’t afford it, but another 21 percent said they had never heard of it.
