Survey Highlights Trend of Saving Younger

Generation Xer's are well ahead of other generations when it comes to saving for retirement, according to a new study from financial brokerage firm, Edward Jones. The study shows that each generation has begun to save at a younger age. Sixty-eight percent of the workforce between the ages of 25-34 say they have already started saving for their retirement, yet only 34 percent of those over 65 say they began saving before they were 34 years old.

"It's encouraging that younger generations are beginning to save earlier," said Clif Helbert, principal responsible for retirement planning at Edward Jones. "No doubt, this is partly due to a growing recognition that company pensions are becoming a thing of the past and the long-term solvency of Social Security is still in question."

Despite each generation starting to save earlier than the previous one, 69 percent of the youngest respondents (18-24) say they haven't yet started making provisions for retirement. The survey also shows that a higher education is highly correlated with retirement planning. Eighty-five percent of college graduates have begun to save for their retirement, while only 62 percent of people with a Graduate Efficiency Diploma (GED) have put money aside.

The survey also showed that the higher the household income, the more likely respondents will have started saving for retirement. Eighty-three percent of workers with annual household incomes over $50,000 have started to save for retirement, compared with only 39 percent of those with incomes under $50,000. The savings habits of people with children also impacts the age they started putting money away for retirement. Of those respondents under the age of 34, 63 percent of those with children had already started saving for retirement compared with only 46 percent of those without children.

"The cost of retirement depends on where you live, your health, desired lifestyle and financial assets and with so many variables, the best strategy is to start saving early," Helbert said. "Gen-Xers are clearly learning from their parent's mistakes and are facing the future now, rather than making plans at the last minute."

The survey of 1008 U.S. adults was carried out by Opinion Research Corporation on June 28, 2007. The margin of error was +/- 3%.

About Edward Jones

Edward Jones provides investment advice and financial services for individual investors in the United States, Canada and the United Kingdom.

Source: Edward Jones