A recent study by The Hartford finds that Americans are optimistic about their personal finances and more are saving for retirement. The study shows increased participation in 401(k)s and other defined contribution plans, especially among boomers, Gen Xers and men. More Americans say they are confident their personal finances will improve during the next 12 months, and this trend is translating into more people saving for retirement.
The Hartford found that participation in 401(k)s and other defined contribution retirement plans by employed adults rose to 76% overall in 2011, up from 71% in 2010 and up 63% from two years ago. Three groups showed the biggest gains:
- Participation by boomers—those closest to retirement—rose to 79%, up from 71% in 2010 and from 63% in 2009.
- 77% of Gen Xers or those ages 32-46 contributed to their employer’s retirement plan in 2011, an increase from 71% in 2010 and from 67% in 2009
- Participation by men jumped to 81%, up from 71% last year and from 66% two years ago.
The only disappointment in the findings was that participation by younger employees ages 19-31 showed a slight decline, and participation among women overall was flat. Seven in 10 women contributed to their employer’s retirement plan, unchanged from the previous year when women showed greater improvement than men. Participation in retirement plans amongst Gen Y declined by 2%.
Overall, most Americans were surprisingly optimistic about their financial future. When asked about the next 12 months, 34% of study respondents said they were “extremely” or “very confident” that their lives would improve. Those expressing optimism cited expected improvements in their personal finances:
- 53% said reducing debt and increasing savings were part of their financial goals
- 52% indicated they were “extremely” or “very” confident their personal finances would continue to improve
- 42% said securing their financial future was their primary goal.
The Hartford’s research also discovered that Americans are feeling better about their lifestyles as well: 26% said they “live comfortably” in 2011, an increase from 9% in 2010. Nearly half of all respondents (48%) said they “meet my expenses with a little left over for extras.”
If you are in one of these groups, perhaps now is the time to reach out to an agent or advisor for the financial guidance needed to make appropriate long-term financial decisions.