This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

We're Not Spending Time on Our IRAs -- or Money

NEW YORK (TheStreet) -- Americans are more likely to spend two hours choosing a restaurant or shopping for a tablet computer than even two hours planning their individual retirement accounts, according to data from TIAA-CREF.

Not only that, but fewer people are opening up an IRA. Only 17% of Americans are contributing to an IRA this year, compared with 22% in 2012.


WATCH: Why Saving for Retirement Is More Important Than Ever

Those numbers come from a survey of 1,008 adults on their outlook on retirement saving and where it fits in their lives.

The financial services industry has spent decades touting IRAs as a useful retirement investment tool for Americans, but most people don't seem to be buying what the industry is selling -- literally.

"An IRA can be an incredibly powerful savings tool that can boost retirement security and offer immediate tax and savings benefits," says Doug Chittenden, executive vice president for individual business at TIAA-CREF. "IRAs can also serve as a valuable supplement to an employer-sponsored plan and help fund a first home or education."

Yet almost half of all U.S. adults (47%) who don't have an IRA say they would consider opening one, a figure that's down from 57% last year.

This comes at a time Americans' retirement savings are disturbingly low.

The Employee Benefits Research Institute says 57% of U.S. adults have $25,000 or less saved for retirement and 49% say they are "not confident" about retiring with enough money to live comfortably for 20 years or longer.

IRAs could help, but Americans don't want to hear it. In fact, TIAA-CREF's Chittenden says much of the blame falls squarely on the shoulders of Americans who should know better -- but don't.

"More and more people are unaware of the ultimate value an IRA can have in a building a stable and secure retirement," Chittenden says. "Americans today bear much more responsibility for their retirement savings than previous generations did. There is a pressing need to educate Americans from all age groups and income levels on the long-term retirement benefits that IRAs provide through compounded investment growth and tax savings."

TIAA-CREF's data say that 35% of U.S. adults "don't understand" an IRA and how it differs from other retirement plans such as a 401(k). That number rises to 45% for Americans under 34 years of age, who stand to benefit most from the long-term financial benefits of an IRA.

If there is some good news in this scenario, it's this: Americans can still contribute as much as $5,500 ($6,500 for those 50 and older) for the 2013 tax year until April 15. And according to TIAA-CREF, any adult who has not previously made a 2013 contribution can make one for both 2013 and 2014 -- totaling $11,000, or $13,000 for those age 50 or older -- through April 15.

That's a good start for any retirement savings campaign.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $129.27 0.63%
FB $79.48 0.64%
GOOG $559.91 0.27%
TSLA $196.71 -3.30%
YHOO $44.08 -0.46%

Markets

DOW 18,241.94 +109.24 0.60%
S&P 500 2,112.20 +7.70 0.37%
NASDAQ 4,992.9350 +29.4080 0.59%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs