Baby Boomer's 401(k) Rebounds With Market, but Still Has a Way to Go

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More People Are Contributing to Their 401(ks), but Is It Enough?

Bixby estimated that if half of 401(k) balance holders are baby boomers about 10 years away from retirement or already retired -- then the balance should be at least a couple of hundred thousand dollars for a realistic retirement.

John Kutz, managing director for Victory Capital Management's Retirement Plan Services Team, said Fidelity's median account balance figure of $24,000 indicates the dire retirement picture for many Americans.

"With the Social Security trust expected to be exhausted by 2037, combined with frozen defined benefit plans, we have the situation where Americans are ill-prepared for retirement," Kutz said.

Doug Orton, vice president at MFS Investment Management, said people may be saving more than the $74,900 average balance indicates because many retirees have multiple retirement accounts.

"Because the work force is so mobile, people are rolling their 401(k) balances into IRAs when they change jobs," Orton said. "I think it's important for pre-retirees to look at their entire situation."

Orton said more clients under the age of 45 -- from generations X and Y -- said they started contributing to retirement funds in response to the recent economic downturn.

About 42 percent of those under age 45 reported that they increased their contributions to their IRA and 401(k) accounts in the past year, according to data collected Feb. 7 to 14 from MFS Investment Management. The company surveyed 596 individuals who had at least $100,000 in household investments.

"For people who used it to make regular contributions to their retirement, it seems to be working as intended," Orton said.

Orton added that it may be best to talk to a financial adviser to map out a retirement plan.

"Until you know what your goal is, you don't know if you're contributing the right amount," he said.

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