Americans Get Some Applause for Stepping Up 401(k) Savings

Americans Get Some Applause for Stepping Up 401(k) Savings

NEW YORK (MainStreet) — Maybe it’s the stock market, which is up over 14,330 points this week.

Or possibly, it’s the value of U.S. homes, where the median price is up 12% from January 2012 to January 2013, according to the National Association of Realtors.

Whatever the cause, Americans are starting to feel a little better about their personal financial situations, and that is triggering a more aggressive approach to retirement savings.

A report on 401(k) savings plans this week shows that U.S. financial consumers are “taking positive action” with their retirement accounts.

The quarterly study, called the 401(k) Wellness Scorecard, is from Bank of America and Merrill Lynch.

It shows that in the fourth quarter of 2012, 81% of U.S. workers either started a 401(k) plan or bulked up their contributions (what survey researchers describe as “positive” action.) Only 19% of employees took what the survey describes as negative actions, including taking a loan out from their 401(k) or decreasing plan contributions.

In fact, the study points out that 401(k) loans declined by 5% in the quarter, suggesting that Americans are more financially stable than in 2008 and 2009, the heart of the Great Recession.

A big part of that generally positive trend is the help employees are getting from employers, who are doing a better job of promoting 401(k) plans to employees. To keep momentum rolling, the Bank of America study says companies need to do even more to get employees involved in their retirement plans.

“HR professionals and financial services providers must continue to work together to protect and improve our retirement system by taking every step possible to help employees start early and continue on a path toward financial wellness,” says Kevin Crain, head of institutional retirement and benefits services at Bank of America Merrill Lynch. “By empowering them to get the most out of their plans, employees can take greater control of their financial future.”