Gen Y Saving More for Retirement

While young people ramp up savings, their parents and grandparents fall behind.

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Many young people are double-dipping when it comes to retirement accounts—and that’s a good thing. A new survey from TD Ameritrade found that one in four 20-somethings funnel money into not one, but two different types of retirement accounts, a 401(k) or 403(b) as well as an IRA.

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But the news isn’t all good, especially for older Americans. The survey also found that just 16 percent of baby boomers are putting money into both types of retirement accounts, and fewer than one in three boomers are making “catch-up” contributions, or contributing an additional $5,500 into employer-sponsored accounts.

Meanwhile, many Americans seem to be looking for other ways to tighten their budgets. Among the survey’s findings:

  • 63 percent of respondents said they automate savings into a savings or investment account each month.
  • 62 percent said they stick to a budget.
  • 83 percent said they track household expenses.
  • About half of baby boomers say they are “somewhat confident” they will meet their retirement savings goals.
  • Four in 10 Americans check in on their retirement accounts at least once a month.
  • About half of respondents said they want to save at least $500,000 for retirement; 23 percent aim to save $1 million or more.
  • The survey reinforces previous findings that suggest the recession has had a positive impact on 20-somethings’ personal finance habits. An investment survey released by TD Ameritrade last year found that four in 10 Gen Y-ers are watching the markets and their portfolios more carefully post-recession, compared to just three in 10 Gen X-ers, who are currently in their 30s and 40s.

    Meanwhile, one in three members of Gen Y invested new money in the stock market recently, compared with just 14 percent of Generation X and 15 percent of baby boomers. Gen Y investors report that they are mostly on or ahead of schedule with their emergency funds and retirement savings, the survey found.

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    Online brokerage company Scottrade has found that Gen Y also enjoys investing. Unlike older generations, they're more likely to manage their money on their own and to feel confident that they will recover their losses from the recession. In fact, one in three of those surveyed said they invest because it's fun, an increase from about one in four last year.

    Scottrade also found that the younger generation is putting more into the stock market: Six in 10 18-to-26-year-olds said they planned to invest additional money in the stock market in the next year, compared with just 43 percent of those between the ages of 27 and 42. One in three respondents told Scottrade that they've learned more about how the economy works because of the recession and a similar percentage said they've become more familiar with their own personal finance situation. Those are higher percentages than any other generation.

    What do you think? Has the recession had any positive impact on your own financial habits?

    Twitter: @alphaconsumer