Data & Research December 8, 2010

Gen Y is Taking Action

Fifty-six percent of those surveyed would love a chance to go back in time, before the recession, so they could change their financial behaviors.
Reported by

A new poll by TD Ameritrade Holding Corporation said it was Gen Y in particular that seemed to learn the most from the recession and are the most likely to be taking action, the news release said. According to the announcement:

  • Forty-one percent (41%) of Gen Y investors are monitoring the markets and their portfolios more frequently following the recession, compared with 30% of Gen X investors.
  • Thirty-four percent (34%) of Gen Y investors have put new money in the stock market, compared with 14% of Gen X investors and 15% of Boomer investors.

“These findings are particularly interesting because Gen Y is often considered somewhat entitled by the masses, especially when it comes to financial matters,” said Nicole Sherrod, managing director, TD Ameritrade, in the news release. “This survey shows their capacity to learn from the mistakes of previous generations and to react and plan accordingly. It’s a very positive sign for the future of our country.”

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

While many (42%) of these children of Baby Boomers say their parents’ generation was better off, they aren’t letting it hold them back. Many Gen Y investors have already made progress when it comes to saving for longer-term financial goals:

  • Sixty-one percent (61%) are on or ahead of schedule with retirement savings
  • Forty-nine percent (49%) are on or ahead of schedule with education savings
  • Sixty-seven percent (67%) are on or ahead of schedule with building an emergency fund
The Markets December 8, 2010

Stepped Up 401(k) Contributions Come Amid Optimism

Contributions to 401(k) plans increased in the last year, according to the latest Principal Financial Well-Being Index, as some investors' spirits seem to be lifting.
Reported by

A Principal news release said 85% of workers eligible for defined contribution retirement plans reported that they are participating, up from 81% of workers a year ago. When asked what changes they have made, if any, to their 401(k) account due to current economic conditions, 18% reported that they have increased their contributions, compared with 13% in the fourth quarter of 2009.

Meanwhile, 45% of workers and 43% of retirees are either very concerned or extremely concerned about the future of Social Security. While a third of retirees (32%) said Social Security is their primary source of income, nearly half (48%) said it is a secondary source of income. Significantly, 69% of those working today expect Social Security to be a secondary source of retirement income.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

When asked how they would manage if Social Security were to fail, 46% of workers said they would remain in the workforce longer, up significantly from 40%

“With mounting worries about Social Security, it appears that fewer workers are staking their future on the system and are considering alternatives, which for many means putting more money in a defined contribution plan,” said Luke Vandermillen, vice president of retirement and investor services at The Principal, in the news release. “On a positive note, it may be a sign the economy is improving that some workers are comfortable increasing their 401(k) contributions instead of dipping into retirement savings to cover daily expenses.”

With 2011 on the horizon, many Americans are feeling more optimistic, according to Principal. Forty percent of workers and 39% of retirees think the economy will improve to some degree in the next year, both significant increases from third quarter 2010. The percentage of workers who are extremely happy with their current financial well-being is up significantly to 31% from 19% from last quarter.

This survey was conducted online within the United States by Harris Interactive October 20-28, 2010, among 1,159 employees and 528 retirees.

«