According to T. Rowe price research, 55% of the young investors do not plan to fund an IRA or are unsure whether they will do so this tax filing season, which ends on 17 April 2012.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The research states that 71% of these investors had made an IRA contribution for the 2010 tax year.
The decline in contribution to IRAs by the young investors is attributed as 42% believing that current participation in a 401(k) plan as adequate currently, 32% feeling they can’t afford it, 23% citing economic uncertainty, 14% citing market volatility and 12% citing job uncertainty.
On a query as to what would be done with an extra US$5,000, only 16% said they would contribute to an IRA, with majority of the investors (56%) saying they would pay off existing debt or add to a rainy day fund.
The study also indicated that many of these investors may have lost faith in stocks, with only 22% of the young investors having expressed confidence about the financial markets heading into 2012.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataHowever, Stuart L. Ritter, senior financial planner for T. Rowe Price opines that young investors need to save consistently.
"There will always be some level of uncertainty and competing financial demands. The longer people wait, the more they will need to save later", Ritter remarked.
