THE SAVINGEST PEOPLE ON GOD'S GREEN EARTH:

401(k)s still lure cash despite big losses: Millions saw the value of the retirement accounts plunge an average of 27% last year, Fidelity finds in a survey, but nearly all continue to invest (Tiffany Hsu, January 29, 2009, LA Times)

Millions of workers watched the value of their 401(k) retirement accounts plunge an average of 27% last year, the first drop in five years, but almost all are continuing to invest, according to a Fidelity Investments survey released Wednesday. [...]

[E]mployees saved an average of $5,600 last year, up about $100 from the previous year, according to Fidelity, which is the administrator for 401(k) plans covering more than 11 million workers at 17,100 companies.

Other researchers have found similar trends. The Investment Company Institute found in a December survey of 22.5 million accounts that only 3% of employees stopped contributing to their plans. Some analysts said investors were hoping to take advantage of depressed stock prices that could rebound over the long term.

"Even though it's impossible to predict the markets, history tells us that they recover eventually," said Doug Fisher, Fidelity's senior vice president of retirement policy development. "So the overwhelming benefits -- tax benefits, employer matching -- of the 401(k) really entice participants to keep contributing."

But, remember, despite topping up your 401k and buying your house you don't save anything, stupid American spendthrift.

Posted by Orrin Judd at January 29, 2009 9:16 AM