Vanguard Report - How America Saves 2019

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ReformedSpender
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Vanguard Report - How America Saves 2019

Post by ReformedSpender » Tue Jun 11, 2019 9:43 am

Did you know more than 5 million people have their 401(k) plan accounts at Vanguard? And despite all the volatility of 2018, only 8% of them made one or more trades or fund changes during the course of the year.

Interesting data points about investor behavior, investment trends and statistics included in Vanguard's latest report found here:

https://pressroom.vanguard.com/nonindex ... Report.pdf

:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

Silence Dogood
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Re: Vanguard Report - How America Saves 2019

Post by Silence Dogood » Tue Jun 11, 2019 10:22 am

Most people ignore their 401(k).

I have a co-worker who recently asked me if I could help him sign in to his 401(k) account. He had never bothered to access his account in the 4 years he'd been contributing (fortunately my employer auto-enrolls people in). This is not abnormal for many (most?) people.

He is probably better off for never having accessed it. He wanted to sign in so he could reduce his contribution to 0%. He figured that he won't be with this employer for long and he didn't want to lose all this money. I informed him that he can roll it over into an IRA when he leaves (i.e. he won't lose the money). I encouraged him to at least contribute up to the company match.

He is a great guy, by the way, just not focused on retirement like Bogleheads are.

cuendillar
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Re: Vanguard Report - How America Saves 2019

Post by cuendillar » Tue Jun 11, 2019 11:46 am

I used to be responsible for many employees. I considered it my duty to review basic (to me) things with them, like insurance, FMLA, and retirement options. At the very least, I would recommend the company match (then 3%), and would demonstrate how it is basically giving a 3% pay increase, helping save on annual taxes, and helping them prepare for retirement. Sadly, many times I would hear themes such as "there is no guarantee we will even be here in 20+ years" or "I need that 3% right now". Good to see the trends are changing.

Jack FFR1846
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Re: Vanguard Report - How America Saves 2019

Post by Jack FFR1846 » Tue Jun 11, 2019 11:50 am

cuendillar wrote:
Tue Jun 11, 2019 11:46 am
I used to be responsible for many employees. I considered it my duty to review basic (to me) things with them, like insurance, FMLA, and retirement options. At the very least, I would recommend the company match (then 3%), and would demonstrate how it is basically giving a 3% pay increase, helping save on annual taxes, and helping them prepare for retirement. Sadly, many times I would hear themes such as "there is no guarantee we will even be here in 20+ years" or "I need that 3% right now". Good to see the trends are changing.
I'd be tempted to start with "How much interest do you get in the bank right now?". They'd likely say something under 1%. Then I'd follow with "If you fund your 401k, that money is getting a guaranteed 100% interest in its first year". More dramatic and it is true.
Bogle: Smart Beta is stupid

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changingtimes
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Re: Vanguard Report - How America Saves 2019

Post by changingtimes » Tue Jun 11, 2019 11:58 am

Am I the only one for whom "5 million" is surprisingly low?

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FelixTheCat
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Re: Vanguard Report - How America Saves 2019

Post by FelixTheCat » Tue Jun 11, 2019 12:02 pm

changingtimes wrote:
Tue Jun 11, 2019 11:58 am
Am I the only one for whom "5 million" is surprisingly low?
I've been in corporate world for 35+ years. I've only had mediocre plans at best. I can never figure out why plan administrators don't pick Vanguard.
Felix is a wonderful, wonderful cat.

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ReformedSpender
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Re: Vanguard Report - How America Saves 2019

Post by ReformedSpender » Tue Jun 11, 2019 12:40 pm

changingtimes wrote:
Tue Jun 11, 2019 11:58 am
Am I the only one for whom "5 million" is surprisingly low?
According to the report, the number was just 3.6 million in 2014.

It's all relative
:beer
Market history shows that when there's economic blue sky, future returns are low, and when the economy is on the skids, future returns are high. The best fishing is done in the most stormy waters.

MathWizard
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Re: Vanguard Report - How America Saves 2019

Post by MathWizard » Tue Jun 11, 2019 12:47 pm

FelixTheCat wrote:
Tue Jun 11, 2019 12:02 pm
changingtimes wrote:
Tue Jun 11, 2019 11:58 am
Am I the only one for whom "5 million" is surprisingly low?
I've been in corporate world for 35+ years. I've only had mediocre plans at best. I can never figure out why plan administrators don't pick Vanguard.
I believe that the plan administrators can push all the customer service onto the provider, who will happily do it for the higher fees.
This takes the workload and liability off the hands of the plan administrators. I don't believe that Vanguard would do the amount
of hand-holding that would work for this. Both my wife and I can only get to Vanguard funds through a second provider, who must
be taking some sort of a cut.

Just my guess, though I do not know for sure.

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