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By Chris O'Shea
According to a new report from Bank of America Merrill Lynch, young people are already thinking smartly about retirement. The study found that a higher percentage of Millennials are contributing to their 401(k)’s than GenXers or Baby Boomers. A whopping 82 percent of Millennials are contributing to their employers’ retirement plan, compared to just 77 percent of Gen Xers and 75 percent of baby boomers.
The reason young people are ahead of the pack might be as simple as they have more access to information than previous generations, and they’re using it to their advantage. “Millennials are doing what the generations before had not done,” Sylvie Feist, director of financial guidance services at Bank of America Merrill Lynch told USA Today. “Maybe it’s because of the advent of digital tools being so readily available and accessible to this generation. They are exposed to a lot more content.”
Despite getting outpaced by their younger counterparts, the news wasn’t all bad for GenXers and Boomers. In fact, the BoA report found that across the board, participation in 401(k) plans was up compared to last year. Account balances, contributions and rate increases all increased by about 20 percent. There was also a bump up in the number of companies auto-enrolling employees in 401(k)s. This is almost as vital as any other stat, as the BoA report found that 97 percent of employees who are auto-enrolled in a retirement plan stick with it.