Among investors in the 21-to-34 and 35-to-50 age groups, 55% do not plan to contribute to their individual retirement accounts for the 2011 tax season, according to research by T. Rowe Price. Heavy debt was the leading factor for respondents, who said they'd rather pay down bills or save for emergencies than save for retirement. Last year, 71% of these investors made an IRA contribution. "Given their economic fears, it is understandable why many younger investors might be unable or unwilling to fund all of their tax-advantaged accounts and are focusing primarily on their 401(k) during this tax season," says T. Rowe Price financial planner Stuart Ritter.
Those who have attributed January's lower jobless rate to more people dropping out of the labor force are not reading the government report carefully, Floyd Norris writes. Data in the report led some to conclude that more than a million people had dropped out of the labor force. But the numbers are more complex, Norris writes, and they show that more people are actually joining the labor force.
More than a quarter of 401(k) participants had all of their retirement-plan assets in target-date funds at the end of last year, compared with 21.4% at the same point in 2010 and 17.4% in 2009, according to Fidelity Investments. Some analysts say the funds can be harmful if they favor stocks too heavily over bonds as the target date nears, but Fidelity's Beth McHugh said such funds offer "peace of mind" for many workers.
Four investment firms -- Fidelity Investments, Great-West, ICMA Retirement and TIAA CREF -- are finalists to manage Rhode Island's new hybrid retirement system, which combines traditional pensions with a 401(k) account, according to state Treasurer Gina Raimondo. The State Investment Commission will choose the winner by the end of February after hearing presentations from each firm.