October 31, 2004

A NATION INVESTED:

Mutual fund survey finds retirement a top priority (MEG RICHARDS, 10/31/04, ASSOCIATED PRESS)

A recent survey found that mutual fund ownership is on the rise after two years of decline, an encouraging signal that Americans are starting to save more money. But although most investors say retirement is their No. 1 priority, experts say the vast majority remain in danger of shortchanging this goal.

According to a study by the Investment Company Institute, the lobbying group for the mutual fund industry, 48.1 percent of households own mutual funds, a slight increase over last year but still below the peak of 52 percent in 2001. The median balance of $48,000 represents about 47 percent of total household savings.

Retirement was the primary investment goal for 72 percent of fund owners surveyed, said Sandy West, the group's director of market policy research. Some 84 percent participate in some sort of defined contribution plan, such as a 401(k) or government thrift, and 69 percent said they own an individual retirement account, up from 57 percent in 1998. For 58 percent of those surveyed, their first investment in mutual funds was made through their employers' defined benefit plan.


People obviously need to save more if we're going to re-privatize retirement, but that's what a reformed Social Security will force. Meanwhile, only in America could you have savings rates this high and be considered a nation that doesn't save.

Posted by Orrin Judd at October 31, 2004 11:43 AM
Comments

Hi, I'm Putnam, and I promise your retirement money is safe with me.

Hi, I'm AIG, and I promise . . .

Posted by: Harry Eagar at October 31, 2004 2:28 PM

I'm currently saving 1/6 of my income while I can. My mutual funds have been pretty much flat this past year, but my mortgage buydown is right on schedule.

Posted by: Ken at October 31, 2004 11:21 PM

Harry:

"Hi, I'm a journalist from Hawaii and I don't believe in savings because I think the market is so crooked."

"Please keep contributing to SS so I will have income in the golden years. And, if anyone tries to reform the system, a pox on him and his ideas."

Have you actually been scared by all the Granny rhetoric?

Posted by: jim hamlen at November 1, 2004 6:01 PM

Jim, are you saying the market isn't crooked?

Posted by: Harry Eagar at November 1, 2004 11:35 PM

No more crooked than any other part of life.

But we don't need to be afraid of it, just aware of it, which doesn't take a whole lot of work, just a little persistence.

For example. buying mutual funds from an insurance company (to relate to your previous post) seems pretty dumb to me. They are probably going to charge more for them, and will push their own products.

I have never understood why anyone would buy other than a no-load mutual fund.

Posted by: jim hamlen at November 2, 2004 12:31 AM

A little more consistency, please.

About 10 days ago, Orrin was pushing for seizing ALL ill-gotten gains. Simultaneosly, you guys are pushing to convern well-gotten gains into ill-gotten gains by processing them through a corrupt market.

And, yes, Wall St. is more crooked than most other sectors of society.

Posted by: Harry Eagar at November 2, 2004 12:03 PM

Harry:

The gains of insiders should all be seized when they diddle the market.

Posted by: oj at November 2, 2004 1:24 PM

I look forward to it, but it never happens, does it?

Posted by: Harry Eagar at November 2, 2004 10:08 PM

I doubt if Wall St. is MORE crooked, but it will certainly get more press when crookedness is exposed.

For example, is it more crooked than (much) union financing and politics? Is it more crooked than collusion between builders and county commissions on zoning? Is it more crooked than the nexus between medical research and big money (re - Vioxx and the questions going back to 1997)? Is it more crooked than the way people file their taxes? Is it more crooked than the RIAA?

There are plenty of other examples to cite.

My point is just that you don't need to rage at the "market", or dismiss it, just because it isn't all sweetness and light. All anyone needs to do is be a little more aware than the average couch potato, and he/she can do OK. Sure, people get burned (Eliot zinged me last week on Marsh McLennan), but on the whole, even when the market is flopping around, we can choose wisely, without being frightened.

Posted by: jim hamlen at November 3, 2004 9:22 AM
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