Studies Indicate Americans lack the Proper Utilization of Investment Opportunities

Recent studies have shown that Americans constantly worry about whether their savings will be enough to satisfy their needs during retirement. The concern is quite reasonable owing to the fact that an average American household contributes almost $40,000 every year for retirement and when it comes to collecting the money from Social Security, an average American is able to get only $17,000. This is a gaping disparity.

Why retirement savings are still slow in growth for many

As of now, a stronger economy is currently allowing people to set aside more money in their retirement accounts. Even so, the biggest factor supporting a big, fat retirement account in the future is the roaring stock market.

In the last quarter of this year, the 401(k) investments have shown a growth of 13% from last year and have increased to $104,300. The same is true for an average individual retirement account or IRA that climbed up by 13% to a figure of $106,000.

401(k)s that have been open for the last ten years have seen an increase of 22.6 percent at $286,700. For investors whose 401(k)s have been open for the past fifteen years, the gain stood at $68,600 last year.

In total, the figures are more than the yearly income of an average American.

Consistent contribution during the good and bad times is what helped these investors in gaining such a huge figure. This is something most people are not willing to stand by since no one wants to invest when the market is down.

The fact remains that every worker actually has a prepared plan to execute financial security during retirement, but very few contribute towards retirement savings.

Among the few who do invest in retirement savings, not many are taking advantage of the stock market benefits. Case in point, studies have found that only 30% of Americans with 401(k)s have actually increased their savings in the past year.

Experts have stated that it is still not too late to take the necessary action. The best shot at saving a good amount for the retirement life starts by saving at least 10% to 15% of the income for retirement as opposed to the 5% to 8% figure.

If this seems too much, gradually increment the amount contributed over the years until a certain level. Even an increase of 1% a year makes a significant difference.

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