Save More – Not Novel but Most Effective in your 401(k)
By Bob Benish
Today’s Wall Street Journal front page article, “New Wave of Workers Tries Novel Approach: Save More,” is an excellent example of how people can take advantage of their 401(k) to maximize their long-term savings. The article quotes numerous studies that show younger people are starting to save more. According to Vanguard, in 2011 44 percent of workers under the age of 25 saved in their 401(k) plans, up from only 27 percent in 2003.
This is great news for savers who understand the benefits of compounding and dollar-cost averaging in an employer-sponsored, tax-deferred savings plan. PSCA believes that getting a new generation engaged in taking responsibility for their future is both a validation of the defined contribution system and a stabilizing influence on the financial markets in general. Plus, it will empower millions of Americans who take advantage of saving in their 401(k) plans to build the foundation of a secure retirement.