E*TRADE Study Reveals the Retirement Hopes and Dreams of Investors under 30
Despite rent, student loans, and early withdrawals from their retirement accounts, investors under 30 feel confident they will enjoy the retirement they want
- They believe they will retire relatively young. Three out of four (76 percent) plan to retire by the age of 64. And nearly nine out of ten (85 percent) are confident they are saving enough to enjoy the retirement they want.
- It's a primary focus of their savings. For almost half (45 percent), retirement is the top priority for long-term saving—even more so than saving for a big purchase or home.
- And it shows in their salary contributions. Nearly nine out of ten (86 percent) allocate more than 5 percent of their salary to a retirement account.
- But housing costs and student loans get in the way. Roughly two-thirds feel that housing costs (69 percent), student loans (66 percent), and other educational expenses (63 percent) are barriers to saving for retirement.
- They're dipping in early. Slightly more than half (54 percent) have already dipped into their retirement accounts. Of those who've made an early withdrawal from their retirement account, nearly three quarters (74 percent) later regret doing so.
"It is great to see young investors focused on their retirement goals and beginning to save early, as the power of compounding returns is significant for this group," commented
- Follow a savings code. The biggest factor to pursuing retirement goals—hands down—is being disciplined about contributions. Younger investors should consider increasing their contribution as their salary grows as it's much harder to scale back income after getting used to a bigger paycheck.
- Work the match. If your employer offers a contribution match to your 401(k), this is as close to free money as one will ever come by in the investing world. It is probably the easiest way to seriously kick start long-term investing.
- Mix it up. Asset location—the idea of strategically deploying investments across taxable and nontaxable accounts—can go a long way towards ensuring your portfolios are optimized for long-term tax efficiency. When you maintain accounts with different tax profiles, such as taxable brokerage accounts, tax-deferred 401(k)s, and
Roth IRAs, you may have more tax flexibility later in life.
- Keep your eyes on the prize. Building and maintaining a well-diversified, risk-appropriate portfolio for the long term is one of the best ways to stay on track to achieving retirement goals. Try to avoid emotional investing pitfalls—like timing the market—by focusing on the long term and sticking to your plan.
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About the Survey
This wave of the survey was conducted from
"Young investor" is defined by surveyed investors between the ages of 18-29. This group represents a sample size of 164 respondents within the total population.
|At what age do you plan to retire from the career you have now?|
|Before age 45||7%|
|I will never be able to retire||1%|
|How confident are you that you are currently saving enough to enjoy the retirement that you want?|
|TOP TWO BOX||85%|
|BOTTOM TWO BOX||15%|
|What are the main reasons you are saving for the long term? (Select top three choices)|
|For an unknown emergency||41%|
|For a big purchase such as a car or new home||30%|
|To pay for an education||24%|
|For vacation or entertainment||24%|
|Simply because it's the right thing to do||23%|
|To take care of a parent or other older relative||22%|
|To get rich||20%|
|I am not saving for the long term, just playing the stock market||3%|
|What percent of your salary are you currently allocating to a retirement account?|
|When it comes to saving for retirement, how much of a barrier is each of the following?
[TOP TWO BOX of "Significant barrier/Somewhat of a barrier"]
|Rent or mortgage||69%|
|Paying down student loans||66%|
|Health care costs||57%|
|Day-to-day living expenses like food or utilities||56%|
|Wanting to live for today||51%|
|Having a parent move in with you||49%|
|Having an older child move back in with you||42%|
|Have you ever taken out money from an IRA or 401(k) before the age of 59.5 and, if so, for what?|
|No, I have never taken out money from an IRA or 401(k) before the age of 59.5||46%|
|Yes, for a medical emergency||20%|
|Yes, to pay for education||19%|
|Yes, because I became unemployed||18%|
|Yes, to make a large purchase||16%|
|Yes, to simply spend on myself or my family||11%|
|Yes, to spend on a vacation||2%|
|Have you ever regretted your decision to take money from an IRA or 401(k) before the age of 59.5?|
|Top 2 Box||74%|
|Very much regretted||24%|
|Regretted a little bit||18%|
|Did not regret at all||8%|
|Bottom 2 Box||26%|
The information provided herein is for general informational purposes only and should not be considered investment advice. Past performance does not guarantee future results.
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