Market and economic uncertainty may have prompted many Generation X and Y investors to hesitate over whether they should invest in a retirement account this tax year, according to a new survey.
Only 45 percent of Generation X and Y investors plan to contribute to an Individual Retirement Account (IRA) this tax year, according to a survey by T. Rowe Price released on Thursday. In contrast, 71 percent of Gen X and Y (defined as ages 35-50 and 21-34, respectively) respondents made an individual retirement account (IRA) contribution for the 2010 tax year.
Fifty-five percent of these investors said they don't plan to fund an IRA, or are unsure whether they will do so this tax season.
T. Rowe Price's research into IRAs and the investing practices of Gen X and Gen Y investing practices was conducted online from Dec. 1-12 by Harris Interactive from a national sample of 860 adults aged 21 to 50 who currently have one or more investment accounts.
Among those who said they plan not to make an IRA investment, 42 percent indicated that their current participation is adequate for now; 32 percent indicated that they can't afford it; 23 percent cited economic uncertainty; 14 percent listed market volatility and 12 percent indicated job uncertainty.
"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," said Stuart L. Ritter, senior financial planner for T. Rowe Price.