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Friday 9 June 2017 BUSINESS
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Sometimes inertia helps: More workers save in their 401(k)

By STAN CHOE are doing so. That’s up 37 percent at plans where ing $100,000 or above par- year. So while they still par-
AP Business Writer from 68 percent a decade signing up is voluntary. ticipated in their plan last ticipate less often, the gap
NEW YORK (AP) — Work- ago, and a big reason for it Most typically, employ- year, the same as it’s been between how much lower-
ers are more likely to be is that workers are getting ers are enrolling workers through the past decade. income workers partici-
saving for retirement, at a more forceful push to do to contribute 3 percent of The story hasn’t been so pate and how much other
least among those eligible so. their pay. Not only that, good for lower-income groups do is narrowing.
for a workplace plan, and — Younger workers are
lower-income employees also more likely to save
have made some of the than before.
biggest gains in recent Odds are only slightly bet-
years. ter than a coin flip that a
Those are two of the en- young employee under
couraging trends borne the age of 25 is setting
out of numbers from Van- aside some pay in a 401(k)
guard, which looks each or similar plan.
year at how participants Last year, an estimated 54
are behaving in 401(k) percent of such eligible
plans and similar retire- workers were doing so. But
ment accounts for which it that’s a much higher rate
keeps records. Vanguard is than a decade ago, when
one of the nation’s big re- only 38 percent of them
cord keepers, working with were.
4.4 million participants in Older workers have also
defined-contribution plans. made gains, but not at the
The outlook for retirement in same rate. Those aged 35
the country is by no means to 44, for example, have
cloudless: Many workers, seen participation rates
particularly those in low- rise 7 percentage points
income households, still to 77 percent, compared
have no access to a 401(k) Freshly cut stacks of $100 bills make their way down the line at the Bureau of Engraving and Print- with the 16 point gain for
plan or similar account. ing Western Currency Facility in Fort Worth, Texas. Workers are setting aside more of their pay- the youngest workers.
checks in their 401(k), and lower-income workers are much more likely to be saving than years
And among those who ago, according to the latest data from Vanguard, released in June 2017. — Workers’ portfolios are
do, experts say savings lev- (AP Photo/LM Otero) better balanced.
els broadly still aren’t high Having too much of any-
enough to guarantee that Nearly half of employer many have also set their workers, who likely feel thing can be dangerous.
most households will be plans, 45 percent, sign programs to automatically less comfortable diverting Experts warn against keep-
able to maintain their stan- their workers up automati- raise workers’ savings rates some of their paycheck. A ing too much of a 401(k) in
dard of living in retirement. cally for the retirement each year. Most increase decade ago, for example, stocks, because they have
But some signs point to plan. That’s triple the rate contributions by 1 percent- only 45 percent of workers the potential to drop sharp-
progress. Here’s a look at from 10 years ago. Work- age point, most typically making less than $30,000 ly on any day. At the same
some of the trends found ers still have the choice to up to a cap of 10 percent. annually participated in time, they warn against not
from Vanguard’s survey , opt out, but requiring that — Lower-income workers their plan. That was less having enough in stocks,
up and down: extra step means more are seeing the biggest in- than half the rate of the because they have tradi-
— Workers are more likely end up saving, and it’s an- creases in participation. highest-paid workers. tionally provided the best
to be saving: other example of trying to Workers pulling down big But the participation rate growth over the long term.
Across Vanguard’s plans, use inertia to help. Only 10 paychecks have always for lower-income workers Vanguard has seen portfo-
79 percent of all workers percent of workers in plans been the most likely to has been steadily climbing lios pull closer to the middle
eligible to save in a 401(k), with automatic enrollment save in a 401(k). More than in recent years, and hit an over time, and away from
403(b) or similar account aren’t participating, versus 90 percent of workers mak- estimated 65 percent last the extremes. q

Nordstrom family considering buyout of department store

NEW YORK (AP) — Mem- fallen by about a third ment stores in the first quar- years given what we view flexibility to navigate a tur-
bers of the Nordstrom fam- since December, rebound- ter, but a key sales gauge as appropriate investments bulent retail environment,”
ily including co-presidents ed more than 10 percent fell short of Wall Street ex- in e-commerce and off- they wrote.
Blake, Peter and Erik Nord- on the news. pectations. The sales re- price assets.” Nordstrom’s board has
strom are considering mak- Department stores in gener- sults at the company’s own A potential move to take formed a committee of
ing an offer to buy out the al have seen their sales and discount stores, Nordstrom the company private independent directors to
70 percent of the depart- financial results battered as Rack, were more encour- “makes strategic and finan- represent the company
ment store’s stock they consumers shop more on- aging. cial sense for the Nordstrom in any talks with the family
don’t already own. line and at off-price retail- “We view Nordstrom as the family,” according to ana- over a potential sale. The
Nordstrom Inc. said Thurs- ers, and are spending their strongest retailer in the de- lysts at KeyBanc Capital chain traces its roots back
day that the group also in- money more on experienc- partment store space,” an- Markets, who said the com- to a Seattle shoe store
cludes President of Stores es and less on clothing, on alysts at Credit Suisse said in pany has been focused on opened by Swedish immi-
James Nordstrom and which department stores a note published Thursday. navigating the long-term grant John Nordstrom and
Chairman Emeritus Bruce are heavily dependent. “We see the company as shifts in retail — sometimes a partner in 1901.
Nordstrom. Nordstrom said last month one of the few retailers to the detriment of earn- Shares in Nordstrom rose
Shares in the department that its overall profit jumped able to grow operating in- ings.So such a move would 10.3 percent to $44.66 on
store chain, which have 37 percent at its depart- come over the next several give Nordstrom “increased Thursday.q