According to a recent analysis of its customers by Fidelity Investments, those people who had both a 401(k) and an IRA had more money saved for retirement than those people who only had either a 401(k) or an IRA. How big of a difference are we talking? Those with both types of accounts had saved 2-4 times as much money as those with only one type of tax-advantaged retirement account.
While this correlation might be explained by simply realizing that with more funded retirement accounts comes more saved money, I suspect there's more to it than that.
One possible explanation that I find plausible is that it stands to reason that people with both types of accounts may have spent more time thinking about retirement (such as figuring out that there are different tax implications for a 401(k) than a Roth IRA, for instance). If these people have thought more about retirement, it stands to reason that saving for retirement is a higher priority than those with just one account, and as a result, these people stick more away for their golden years.
What do you think? Why do you think there's such a marked difference between the two groups? Let me know in the comments.
4 comments:
This may be a no brainer, but I'm thinking that if a person has 2 accounts they save twice as much, at least.....
I think that that's a safe guess, but I still suspect that the fact that people have both is indicative that they're more interested in saving.
I think you're right. The people who open a Roth IRA when they have access to a 401(k) are probably more money-savvy than those who don't and more personally motivated to save.
We just have Roth IRAs because our employer doesn't provide 401(k)s. Next job, I hope!
I have both, but I'm very very new to investing, so I'm not even sure why I went that way instead of just sticking with one (my employer offers a 401(k) with no match). One of my 2012 goals is to max out my Roth IRA contributions -- I'm playing catch-up from a handful of previous years!
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