| Young People Better at Retirement Planning and Young U.S. workers adding stocks to 401 plans |
| News - Financial News |
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NEW YORK (MainStreet) -- When it comes to socking away money for retirement, young Americans are putting their parents and grandparents to shame. That's the conclusion of a survey by brokerage firm TD Ameritrade , which asked Americans young and old what they are doing to fund their retirement. The good news is that most of us are at least saving something for retirement: A solid 85% of Americans have either a 401(k) or an IRA, and 36% have both. A survey finds that the offspring of baby boomers are better at saving money for retirement than their elders. But when it comes to actually taking advantage of the full range of retirement options out there, there's a big generational divide at work -- and for once it's young Americans who are proving to be more responsible than their elders. Just 16% of working baby boomers are funding both an IRA and a 401(k), compared with 25% of members of Generation Y and 23% of Gen Xers. [Read the full article] To help avoid outliving their assets, more retirees should defer Social Security and consider income annuities, according to a report prepared by the General Accounting Office for the U.S. Senate's Special Committee on Aging.Yet many retirees do just the opposite, according to data presented in the report. Between 1997 and 2005, roughly 43% of Social Security-eligible individuals began taking benefits within one month of turning 62, even though waiting until their full retirement age would've translated into a substantially higher payout.Retirees also skimp on annuities, according to the study, even though several research papers, including this one (http://corporate.morningstar.com/us/pr/WP2010Nationwide_VA_GMWB.pdf) from Ibbotson Associates, have demonstrated that the products can help ensure that individuals don't outlive their savings. [Read the full article] How much should I have in a 401(k) or other retirement accounts at various ages relative to my salary so I know I'll eventually enough money to maintain my standard of living throughout retirement? -- K.T., Olathe, KansasWhen I was growing up in Philadelphia, my family would take trips to Wildwood, N.J., in the summer. Along the way, we'd stop for breakfast at Olga's Diner on the Marlton circle (both the diner and the circle are now gone).As a kid, I had no idea of how to get from Philly to the Jersey shore. But that annual stop was an indication to me that we were on the right route to our summer vacation.Essentially, you're asking for the same thing: a benchmark or milestone -- the financial equivalent of an Olga's diner -- that will tell you whether you're on the right path to a comfortable and secure retirement.There are several ways for you to gauge that. [Read the full article] 
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