February 26, 2021

Bucks Blog: The Industry With the Most Steadfast Retirement Savers

What is it about utility workers? They apparently are among the country’s most dedicated retirement savers, according to new research from Vanguard.

Larger numbers of employees of small utility companies tend to save more in their 401(k) plans than workers in many other industries, the study found. Those at utility firms with fewer than 1,000 employees had a 92 percent participation rate. (Employees at large mining companies followed, with an 88 percent participation rate.) Vanguard plans as a whole had a 74 percent average participation rate.

On average, participants in the plans of both small and large utilities saved a higher percentage of their incomes, too: their 9 percent and 8.2 percent average contribution rates, respectively, surpassed the 6.8 percent average rate for Vanguard plans over all.

The study did not delve into the details of why certain industries were better than others at signing up employees and encouraging them to save. But longer-term employees in profitable industries tend to save more in general. And it may also be that some lines of work attract people who are inclined to be better long-term planners.

Utilities, for instance, tend to have workers who can map out gas production for the next 20 years. They may also apply those skills to their own retirement-saving efforts. “Utilities have engineers, armed with their spreadsheets,” said Steve Utkus, head of Vanguard’s Center for Retirement Research.

The industry studies are part of Vanguard’s annual How America Saves report, which examined overall patterns of more than three million participants in plans administered by Vanguard.

The report notes that overall plan participation dropped a bit, as the tough economy canceled out increases in participation due to automatic enrollment. (The report was released before the most recent stock market turmoil.)

Do Vanguard’s numbers on your industry surprise you?

Article source: http://feeds.nytimes.com/click.phdo?i=804d59e513130bbfb3d5e74b153be0be

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