Data shows that nest eggs, on the whole, are smaller these days. But a recent survey suggests a bit of good news: since the financial crisis, median retirement savings across age groups have grown by leaps and bounds.
From the Christian Science Monitor:
Despite all the attention paid to insufficient total savings, median retirement savings among working-age households have grown considerably over the past five years, according to the 15th Annual Retirement Survey from the Transamerica Center for Retirement Studies. The survey tracked median retirement nest eggs among employed American baby boomers, Generation Xers, and Millennials between 2007 and 2014. For each age group, median savings either doubled or tripled within that seven-year span.
“We’ve seen a healthy increase in savings for employed people,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies based in Los Angeles, in a phone interview. The recession, she notes, “set off the alarm bells in a way that they weren’t ringing before and took [saving money] to a new level of urgency, and that’s a good thing. If we look at the national dialogue, it’s difficult to turn on the Internet, TV, or radio without hearing some form of conversation about the need for people to plan and save and think about their loved ones.”
Millennials, perhaps predictably, reported the most robust savings growth of the three groups, more than tripling their savings from $9,000 in 2007 to $32,000 in 2014. Xers, the first of whom will start turning 50 next year, doubled their nest eggs, from $32,000 to $70,000. For boomers, median savings increased from $75,000 to $127,000.
There are a host of reasons for the savings increase. Perhaps the biggest is that in a world where defined-contribution plans are overtaking defined benefit plans, the bullish stock market has been a boon for 401(k)s.
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