By Christopher Maynard
Christopher Maynard is a New York-based writer and
editor who has worked as a security guard, high school teacher, theatrical
lighting designer and volunteer fireman. He is a graduate of Marist College.
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Christopher Maynard
August 22, 2016--About a year
ago, a survey showed
that U.S. consumers were becoming less inclined to save for retirement because
they didn’t want to sacrifice their current quality of life. While they
considered tools like a 401(k) plan to be integral towards future security,
many just weren’t willing to commit to it.
Now, a new study conducted by
Bankrate.com shows a reversing trend; it says that more American workers are
saving for retirement. Experts say that this could be a positive sign for a
growing economy.
“More working Americans are saving
more for retirement and fewer aren’t saving at all,” said Greg McBride,
Bankrate.com’s Chief Financial Analyst. “Both readings are indicative of an
improving economy, where people are earning more and saving more.”
Gen Xers and Millennials lead the way
The results of
the study show that 21% of working Americans are now saving more for retirement
than they were a year ago, the strongest improvement in five years.
Additionally, fewer people are
completely forgoing the saving process; only 5% of survey respondents admitted
that they hadn’t saved anything this year or last year, the lowest result in
the history of the study.
So which generations are leading the
way in this new financially-conscious movement?
Experts say that consumers belonging
to Generation X (age 34-54) are saving the most, followed by Millennials (age
18-25). Members of the Silent Generation (age 71+) are saving the least,
followed by younger Baby Boomers (ae 52-61).
McBride says that members of the
Silent Generation may be less inclined to save because they are reaching the
phase of life where they will be entering retirement; however, not saving
can still be very problematic for this group and Baby Boomers.
“Younger Baby Boomers saving less
for retirement than last year is troubling because they’re more likely in their
peak earning years and should be utilizing higher catch-up contribution limits
to get on track for retirement. Those in the Silent Generation that are saving
less may be a function of earning less as they phase into retirement,” he
said.
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