In the first half of 2014, the number of Millennials enrolling for the first time in a 401(k) plan jumped 55%, according to the Bank of America Merrill Lynch 401(k) Wellness Scorecard. This twice-yearly report examines trends among 2.5 million plan participants with $129 billion of assets under the bank’s care.
The brisk initial enrollment pace is due partly to the sheer number of Millennials entering the workforce. They account for about 25% of workers today, a figure that will shoot to 50% by 2020. But it also reflects a broader trend toward 401(k) enrollment. Across all generations, the number enrolling for the first time jumped 37%, Bank of America found.
Those opt-out 401K forms (instead of the opt-ins of yesteryear) are doing wonders for 401K plan growth. Plus there are apps you can use to manage your account and keep tabs on the amounts going in and growing. I wonder what the numbers are for Millennials re-balancing their portfolios though. Do they set-it and forget it or do they look at it quarterly? Or do they change things around whenever they see something on TV?
Now what the government needs to do is allow people to put more money in 401Ks than ever before to encourage savings. The employee match is one of the few ways a person can accrue wealth tax free left in America and Millennials need to tap that source for all its worth.