A recently-released report is showing that Americans are putting more money toward their retirements than ever — and the trend is taking place across all age groups.
According to a July 23 USA Today article, the average contribution to individual retirement accounts (IRAs) during the tax year 2013 grew by 5.7% over the year before, bringing the amount to an all-time high of $4,150, and the average IRA balance increased 10% to $89,100.
The average IRA contribution increased for every age group as well, according to the Fidelity Investments study published on July 23. Respectively, the average contribution grew by 3.9%, 6.7% and 6.2% for people in their 20s, 30s and 40s.
Another Fidelity Investments study showed that the top New Year’s resolutions this year were to save more, pay off debt and spend less, USA Today reports, which may explain the rise in contributions toward retirement savings.
“People are increasingly hands-on, from on-the-go cameras to on-design 3D printing. Part of this trend is taking control of your finances,” said Beth Kurth, President, Corporate Forum. “When people take an active interest in investing, there’s a virtuous feedback loop. It’s like a diet only in reverse. With a diet you’re motivated to eat less when the scale shows fewer pounds. With savings you’re incented to put away more as you see your investments grow.”
There are plenty of reasons for Americans to allot more of their money toward retirement. About one of every four Americans will have to work until age 80 in order to retire with enough money, and the number of employers offering retirement funding plans for their workers has decreased significantly over the last decade.
Plenty of challenges and hurdles to saving for retirement exist as well, however — including most people’s preference of instant gratification over investing toward a long-term goal like a retirement.