Page 7 - Aruba Today
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U.S. NEWS A7
Friday 8 January 2016
US Financial Front:
Workers are saving more for retirement, led by Millennials
STAN CHOE plans are automatically This photo shows workers at the Target Technology Innovation Center office in San Francisco.
AP Business Writer enrolling them and According to a survey by Fidelity Investments, millennials between the ages of 25 and 34 are
NEW YORK (AP) — increasing how much they saving a median of 7.5 percent of their pay for retirement, including whatever match they get
Workers are saving more contribute each year. from their jobs.
for retirement, and the Those programs tend to put
youngest — not exactly contributions into a target- (AP Photo/Jeff Chiu)
known for squirreling money date mutual fund, one that
away — are boosting their takes care of how much
savings rates faster than to invest in stocks versus
any other age group. bonds based on how close
Millennials between the an investor is to retirement.
ages of 25 and 34 are saving That means workers also
a median of 7.5 percent generally have more
of their pay for retirement, appropriately balanced
including whatever match accounts than a couple
they get from their jobs, years ago, Fidelity says. A
according to a survey by target-date fund prevents
Fidelity Investments of 4,650 a 20-something worker
households with at least — who has the luxury of
$20,000 of annual income. decades to go before
That’s up from 5.8 percent retirement — from investing
two years ago, when the only in bonds, which are
last survey was conducted, safer but have historically
and it is the largest jump offered lower long-term
among all age groups. returns.
That’s still not enough, but The survey was Fidelity’s
at least the trend is getting attempt at measuring how
better. Financial advisers prepared workers are for
suggest socking away 15 retirement. Fidelity looked
percent of pay, and more at how much workers
if workers haven’t saved in make, spend and save, as
their earlier years. well as when they expect to
Younger workers had retire, among other factors.
the most room for It found that 45 percent
improvement, because are likely to afford at least
they were saving such a their essential expenses
pittance. Older workers in retirement, up from 38
were already saving more percent two years ago.
of their paychecks. Workers Older workers are the most
aged 35 to 50 are now prepared for retirement,
socking away 8.2 percent and not just because
of their income, up from 7.7 they’ve had longer to
percent two years ago. The save. One reason is that
oldest workers, aged 51 to older workers are more
69, are saving 9.7 percent, likely to have access to
up from 8.1 percent. pensions, which guarantee
Several reasons are behind income in retirement but
the rise, said John Sweeney, have become rare in the
executive vice president of workplace.
retirement and investment Older workers also seem
strategies at Fidelity, to have more realistic
including an improving job expectations than those
market and economy. The fresh out of school.
unemployment rate is at its “The further you are from
lowest level since 2008, and retirement, the more you still
workers are feeling more hold aspirations of retiring
comfortable in their jobs early,” Sweeney said.
and with their finances. “Boomers are saying it may
Some workers are also make sense to continue
saving more without to work and extend that
knowing it, because their retirement date from 62 to
401(k) and other retirement 65 or 67.”q
