US. An increasing number of savers are rejecting retirement accounts in favor of these investments
More people are stashing their money in taxable accounts and less so in employer-sponsored retirement plans.
Ownership of taxable brokerage accounts jumped 10 percentage points over the last five years, and checking, saving and CD accounts increased 9 percentage points, according to retail investor data firm Hearts & Wallets. Meanwhile, ownership rates remained the same for employer-sponsored plans like a 401(k), but consumers were contributing less — a total decline of 5 percentage points.
Accounts with specialties, like Roth retirement plans (where money is taxed first, and then withdrawn “tax-free”) and 529 plans for higher education expenses, are also in demand, said Laura Varas, chief executive officer and founder of Hearts & Wallets. Ownership of college savings plans increased from 8% to 11% over the last five years, though the amount of money in those plans dropped from 28% to 19%.
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