More workers are following experts' advice in saving for retirement, even when finances feel precarious.
– It’s happening because 401 plans are using a simple human trait to guide us: our inclination to do nothing.
More than four out of five workers eligible to contribute to their 401 were doing so last year, at 81%. That also held steady from a year earlier, and it was up from 74% in 2012.Over the years, employers have become more likely to enroll workers automatically into the 401 plan. Employers have also been starting workers off contributing higher amounts, again automatically. And as the years roll on, plans are set to automatically increase the percentage of those contributions.
In part because of that, the median 401 balance rose to $35,345 last year. That's up from a median of $33,472 a year before and from $27,843 in 2012. When workers leave their jobs either to move to a new one or to retire, they can cash out their 401 balances. Experts discourage this, calling it retirement “leakage."Not only can a cash out invite taxes and penalties, it also means workers don't benefit from the magic of compounding their savings over the years.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Lawsuit Claims US Labor Department's Crypto Guidance Is Unlawful – Regulation Bitcoin News'This lawsuit seeks to preserve the rights of American investors to choose how to invest money in their own retirement accounts.' bitcoin crypto cryptocurrency $BTC
Read more »
‘Things are getting worse’: Bexar County to spend $37 million in effort to reduce shootings, violenceMindful of the tragedy in Uvalde, Bexar County commissioners approved a $37 million...
Read more »
Your Next Quarterly 401(K) Statement May Be Alarming. Here's WhyMany retirement savers will get 401(k) notices with a new income projection starting in a few weeks. It may be a wakeup call.
Read more »
What CFOs Are Planning If the Economy Goes SouthBattle-hardened by the early days of the pandemic, U.S. companies are looking back at their performance during prior slowdowns and identifying possible cost savings, finance chiefs say.
Read more »
Doctor named in abortion case has nothing to do with lawsuitDr. Thomas Dobbs has never gotten involved in political fights over reproductive health, but his name has become shorthand for a legal case that could end abortion rights in the United States
Read more »
Crypto 401(k): Sound financial planning or gambling with the future?Would you stake your retirement on crypto? That could become a reality with 401(k) plans permitting cryptocurrency investment, but is it a sound investment strategy?
Read more »