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Well, the Money is Going to Savings

5/18/2015
By Charles Payne, CEO & Principal Analyst

Americans are participating more in their 401K plans as new enrollments from June 2013 to June 2014 increased by 37%, led by a 55% increase among Millennials.

While cynics will see a correlation of this development to the old story of the shoeshine boy and Joe Kennedy, Main Street is getting in too late and signaling a top. However, I think it is great news.

Investing is a lifelong endeavor that has ups and downs, but it can make and change lives.

Young and Not so Dumb

The spike in participation among younger adults points to a realization that options are changing and a willingness to do the right thing. That means saving and working even into the golden years.

Expected Sources of Income in Retirement

Boomers

Gen – X

Millennials

Employer-Sponsored Pensions

19%

12%

12%

Employment

17%

12%

26%

Social Security

41%

33%

26%

Savings

18%

30%

32%

 

In addition to greater participation, Bank of America reports a 27% increase in voluntary increases in contributions.

Recently, a subscriber sent me an email delighted about his daughter investing in the market:

“Kelly graduated 4 years ago. She works for Raytheon and contributes 10% to the 401K that they match! (Limits of course) to my delight she wants to take the funds from her 529 and invest via a trading account.”

I’m thrilled for Kelly and all the younger folks looking to the future, just max out those employer matches (American workers leave $24 billion on the table each year from not maxing matches) and stay the course.

Charles Payne
Wall Street Strategies


 

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