Page 2 - August 2019 Lakewood Edge

saving & investing
YOUR MONEY

WE BREAK DOWN

VANGUARD’S ‘HOW AMERICA

SAVES’ 2019 REPORT

by Erin Arvedlund women earning $50,000 to $74,999
MORE THAN 100 participated in their employer’s plan
ant some highlights of —compared with 78% of men in the
how Americans save for same income group.
W retirement? We read MILLION AMERICANS During 2018, only 13% of
Vanguard’s latest “How America investors saved the maximum dollar
Saves” 2019 report issued on Tuesday ARE COVERED BY DC amount of $18,500 ($24,500 for
LAKEWOOD for trends and other takeaways. participants age 50 or older). Investors
Here are some key highlights from
REAL ESTATE EDGE Vanguard’s report on the popular PLAN ACCOUNTS, who contributed the maximum
tended to have higher incomes, were
workplace “defined contribution”
Publisher older, had longer tenures with their
Allison Van Wig (DC) retirement plans, those filled WITH ASSETS OF MORE current employer, and accumulated
CA DRE #00985700 by matching contributions from the substantially higher account balances.
employee and the employer and do
not promise specific benefits. More THAN $7.5 TRILLION. ACCOUNT ACCESS TRENDS
than 100 million Americans are Vanguard investors have four ways
covered by DC plan accounts, with to check accounts: phone calls to
assets of more than $7.5 trillion. humans, phone calls to an automated
In 2018, the average account averaged 5.2% annually. holding a single target-date fund
4435 E Village Rd balance for Vanguard participants Among continuous investors— traded in 2018.” voice-response system, a mobile
Long Beach, CA 90808 was $92,148; the median balance was those with balances at year-end 2013 application, and the website.
$22,217. and 2018—the record was far better. EMPLOYER MATCH Overall, the website remained the
562-882-1581 In 2018, Vanguard participants’ Median account balance rose by 78% Among plans offering a matching most widely used channel in 2018—
Allison@superbroker.com average account balances declined over five years, reflecting ongoing contribution in 2018, seven in 10 half of investors used the website,
www.SuperBroker.com compared with 12% who used
by 11% compared with 2017 and contributions and the bull market. (covering two-thirds of Vanguard
median account balances declined by investors with this type of retirement telephone with humans.
16 percent. (Note that this report looks VERY LITTLE TRADING plan) provided a match, such as 50 Introduced between 2009 and
at “defined contribution” retirement During 2018, only 8% of “defined cents on the dollar on the first 6% 2011, mobile applications were used
plans typically tax-deferred, like a contribution” plan investors traded of pay. by 28% of investors.
401(k) or a 403(b), not pension plans). within their accounts, while 92% In 2018, seven in 10 employers’ In terms of total contacts, the
Three reasons: a changing did not. That means more than 9 retirement plans had a participation website dominates, but mobile is
business mix—new plans converting out of 10 Vanguard investors did rate of 80% or higher, while less than also becoming a preferred channel.
to Vanguard recently have lower NO trading last year. Talk about 10% of plans had a participation rate Website interactions accounted for
account balances; the rising sticky assets! of less than half. 53% of all contacts in 2018, averaging
6425 Busch Blvd., about 12 website interactions per year.
Columbus, OH 43229 adoption of automatic enrollment, On a net basis, there was a shift
877.872.3080 which results in more individuals of 1.1% of assets to fixed income WOMEN VS. MEN, Each distinct logon is counted as a
www.DiscoverPubs.com saving, but with smaller balances; in 2018, with most making only OLDER VS. YOUNGER unique contact. Mobile access, though
4 in 10 investors had joined their small changes to their portfolios, the Men and women invest at about relatively new, was the second most
Sudoku, Scrabble, Crossword
and articles distributed by plan under automatic enrollment; report said. the same level, but those figures fail popular channel, accounting for 41%
Tribune News Services and and finally, U.S. markets dropped Over the last decade, Vanguard to account for the income differences of all contacts. n
Brandpoint where noted. 6% in 2018. has seen a decline in trading that is between men and women. At all
© Copyright 2019 by
Discover Publications, Inc. Vanguard’s median one-year “partially attributable to participants’ income levels, women are more likely ©2019 The Philadelphia Inquirer.
All rights reserved. investor total return was a loss of increased adoption of target-date than men to join their employer’s Distributed by Tribune Content
6.5% in 2018. Five-year total returns funds. Only 2% of participants plan. For example, in 2018, 87% of Agency, LLC
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