“The decision of how much employees contribute to their 401(k) far exceeds the importance of which investment funds they choose,” said Thomas Totten, senior actuary and lead researcher for the study. “By increasing your contribution by just 2% to 4% of total income, you can shave years off the age you retire.”
Here are some additional findings from the study:
· Eighty-one percent of employees 18 or older will not be able to afford to retire by the age of 65.
· The average participant, relying on their 401(k) as a primary retirement vehicle, will not be able to retire until the age of 73.
· Thirty percent of employees 24 and under do not participate in a 401(k) benefit.
· Seven in ten employees 24 and under are not expected to retire by age 65.
This is one reason everyone should sit down with a planner at a young age. If you want to retire at a reasonable age, you should plan for it now and save as much as possible. I encourage every working young person to “max out” their 401(k) contribution now. You won’t miss the money now, but you might later!
Read the original article at: http://www.fa-mag.com/fa-news/6476-study-401k-contributions-too-small.html