Why shouldn’t they? Most don’t have a retirement savings account anyway.

A recent poll from investment firm Edward Jones says less than half of Americans contribute to a 401(k). Most of those who do wrongly assume it’s free.

Twenty-two percent don’t know they have to pay fees on their 401(k) accounts, but 96 percent know how much Netflix charges them every month, says a separate poll from TD Ameritrade.

In this round up, we go over 401(k)s and retirement savings. From Gen X’s financial goals, to the best retirement cities for LGBT couples.

Wait, I have to pay fees on my 401(k) plan?

Americans pay attention to what their media streaming services charge them, but not their financial service providers. That’s what a poll of 1,000 401(k) investors concluded.

The vast majority know off the top of their head what Netflix, Hulu and Spotify will bill them every month. However, only 27 percent know how much they pay in fees to their 401(k) plan. Thirty-seven percent don’t believe they have to pay fees. Another 14 percent don’t know how to determine if they do or don’t have to pay fees.

“While often overlooked, fees can put a drag on investment performance and impact portfolio value over the long term,” says Matthew Sadowsky, director of retirement and annuities at TD Ameritrade. “It can be onerous to read through all the disclosure information and documentation to understand the fees, but just because it’s hard to decipher doesn’t mean those fees don’t exist.”

The survey’s results are not all that surprising, since most Americans don’t invest in a 401(k) plan anyway.

Retirement savings plan, what’s that?

Americans are in the dark for retirement savings accounts all around.

Edward Jones polled over 1,000 Americans and determined that over half (51 percent) aren’t contributing to an employer-sponsored 401(k) retirement plan. Even less are saving through an individual retirement account (37 percent), or a health savings account (18 percent).

“While 401(k) participation has increased over the years, there continues to be opportunities for Americans to better utilize not only employer plans, but they may also be overlooking other popular retirement savings tools,” says Scott Thoma, principal and investment strategist for Edward Jones. “Individuals seem to understand the key risks they will face in retirement, so it is important to design a comprehensive strategy, considering all of these retirement savings vehicles, to ensure they can prepare for these risks.”

One generation that values their 401(k) plans is Generation X.

Gen X: Retirement is creeping closer

Most Gen Xers (65 percent) view saving for retirement through an employer-sponsored 401(k) plan as a major financial goal, according to T. Rowe Price. The investment firm polled over 3,000 investors with a 401(k) plan, finding that goal was right behind having peace of mind financially (77 percent), and maintaining their quality of life (70 percent).

Which is good to see. Thirty-seven percent of Gen Xers reported concern about affording retirement at the beginning of this year in a previous study from TD Ameritrade.

“Those in Generation X are at a time in their lives when awareness and concern for their retirement savings is steadily increasing,” says Anne Coveney, senior manager of retirement thought leadership at T. Rowe Price. “This group is also balancing competing financial demands, with the majority of them indicating their households have numerous financial objectives. ”

What are those financial objectives?

  • 86 percent: maintaining an acceptable quality of life
  • 84 percent: managing and budgeting for day-to-day expenses
  • 75 percent: reducing debt

The progress these Gen Xers are making is slow compared to what their investment company recommends. Gen Xers save 9 percent of their salary, on average, and more than half save less than 10 percent, according to the study. T. Rowe Price recommends to save 15 percent.

After saving for retirement, most people want to move to a state where they can relax and enjoy their next chapter, post-career. It’s always great to move to a state where the living costs and taxes are cheap, especially on retirement income.

For LGBT couples, they consider that, plus, wanting to be in a gay-friendly state.

LGBT-friendly retirement cities

SeniorAdvice.com recently released their 2018 top 20 LGBT-friendly retirement cities.

The list was put together and determined by the amount of LGBT residents, the rate of LGBT members in local government, whether or not there are gay-friendly senior communities, and the local and state laws protecting the LGBT community. Not to mention retirement friendly interests.

The list also ranks the quality of healthcare, number of hospitals and pharmacies, cost of living and weather.

The top five LGBT-friendly retirement cities

  • Fort Lauderdale, Florida
  • Austin, Texas
  • Atlanta, Georgia
  • Portland, Oregon
  • Palm Springs, California

“There are 3 million LGBT people age 55 and older living in the United States,” says a press release of the list. “With that number increasing each year, the need to discover locations that are welcoming to LGBT elders also increases.”

Meet the Author

Joe Pye

Joe Pye

Associate editor

Pye is the associate editor of Debt.com.



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Article last modified on April 25, 2018 Published by Debt.com, LLC . Mobile users may also access the AMP Version: Americans Care About Netflix More Than Their 401(k) Plans - AMP.