TD Ameritrade Survey: Gen Y Saving More Rigorously For Retirement Than Their Parents & Grandparents

The “Entitled Generation” they are not – at least not when it comes to planning for their retirement. According to a new survey of working Americans from TD Ameritrade Holding Corporation (NASDAQ: AMTD), members of Generation X and Y appear to have embraced the concept, and responsibilities, of self-directed investing more so than their Boomer and Mature parents and grandparents.

While investors as a whole continued to make steady progress toward their long-term financial goals in 2011, despite a turbulent stock market and economy, this survey reveals that many older Americans are missing out on opportunities that could position them for further success.

The vast majority of working Americans have the basics. According to the survey, 85 percent have an Individual Retirement Account (IRA) and/or a 401(k)/403(b) plan. And, more than a third (36%) have both. But, it’s the younger generation of workers who are more diligently saving: 25 percent of Gen Y and 23 percent of Gen X are funding both their 401(k)/403(b) plans and their IRAs, compared to 16 percent of Boomers and 9 percent of Matures. Yet, 74 percent of Boomers are not completely confident that they will reach their savings goal by the time they are ready to retire.

“The good news is that many working Americans, especially those who are young, are taking advantage of saving for retirement in a tax-free environment through options like an IRA, despite a tough economy,” said Carrie Braxdale, managing director, investor services, TD Ameritrade, Inc., a broker dealer subsidiary of TD Ameritrade Holding Corporation. “But funding these accounts on a regular basis is the key – even if it’s a small amount. Every year that you don’t fund your IRA is lost opportunity for tax deferral to help with growth.”

Many Boomers are also missing out on another chance to bolster their retirement savings. Among the 50+ crowd, those eligible for the “catch-up contribution,” a feature allowing them to contribute an additional $5,500 to an employer-sponsored retirement plan, more than two-thirds (68%) are not taking advantage of the opportunity. Half of them are skipping out because they can’t afford it, but another 21 percent said they had never heard of it.