New Schwab Survey: Gen-X'ers Facing Significant Roadblocks on the Road to Saving for Retirement

SAN FRANCISCO--()--A new survey from Charles Schwab & Co., Inc. shows younger investors are aware they should be saving for retirement, but face significant challenges like competing spending priorities and a lack of information to make simple investment choices. Schwab surveyed over 500 Americans between the ages of 25 and 40 -- a range that generally overlaps with the so-called Generation X -- regarding finances and retirement.(1)

The survey found paying daily living expenses is a higher priority than saving for retirement for this age group, with paying off debt also a significant factor. While more than eight in 10 of those born into Generation X are taking some sort of action to save for retirement, only 40 percent of those who are saving have an IRA. Those who do not have an IRA say they don't need one, don't have enough money to fund one, or believe the accounts are too complicated.

"Gen-X'ers are facing a range of financial challenges -- from paying off college debt to making mortgage payments to saving for their families," said Rande Spiegelman, vice president of financial planning for the Schwab Center for Investment Research. "What we are seeing in these results is that competing spending priorities are impacting their ability to save for retirement. But with a few minor adjustments, younger investors can make the necessary changes to ensure they are doing everything they can to save for the future."

More than four in ten (44 percent) of those who do not currently fund an IRA said they would be more likely to invest in an IRA if there were a simple, one-time investment choice to automatically help them reach their retirement goal. This perspective was shared almost equally between current IRA/401(k) investors (50 percent) and non-investors (39 percent). One in five Americans (20 percent) in this age group report that they either do not have enough information to understand how an IRA works or they simply do not know what an IRA is.

Tax Refunds Offer Great IRA Opportunity

The survey found only 16 percent of people in this age group plan to use their tax refund to invest in an IRA or other retirement account, with the majority opting to either save it for other uses (59 percent) or use it to pay off debt (58 percent). Many are likely unaware that the Pension Protection Act -- signed into law last summer -- gives taxpayers the ability to directly invest all or a portion of their refund into an IRA. The option appears on forms for the 2006 tax year.

"15-Minute IRA" Offers Advantages To Younger Investors

The release of the Schwab survey coincides with the company's recently launched "15-minute IRA," which makes it easier than ever for people to open and fund an account, and at the same time select a fund that targets their retirement date or choose from a wide range of other investments. Schwab IRAs offer a number of advantages to investors, including no account service fees.(2) Schwab IRAs also provide access to a wide range of investment choices, from Schwab Target date retirement funds to hundreds of other no-load, no transaction fee mutual funds, as well as stocks, bonds, CDs and more. Investors can open an account by visiting, calling 1-800-398-9609 or visiting a Schwab branch. Additional resources, including an IRA Analyzer that helps investors find the IRA type that's right for them are also available at


About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 6.8 million client brokerage accounts, 570,000 corporate retirement plan participants, 149,000 banking accounts, and $1.3 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, ), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Schwab Institutional division. The Charles Schwab Bank, N.A. (member FDIC) provides banking and mortgage services and products. CyberTrader(R), Inc. (member SIPC, ) is an electronic trading technology and brokerage firm providing services to highly active, online traders. More information is available at (0207-5613)

Important Footnotes and Disclosures

(1) The survey was conducted by StrategyOne using three waves of an omnibus survey among 561 Americans aged 25-40. Interviews were implemented via telephone from January 12, 2007 through January 23, 2007 using the field services of Opinion Research Corporation (ORC). ORC uses a rigorous methodology including random digit dialing and computer-assisted telephone interviewing. The margin of error for the total sample of adults was plus or minus 4.1 percentage points at the 95% level of confidence, which means that in 95 out of 100 times that a sample of this size is drawn, the results would not vary by more than 4.1 percentage points in either direction. The margin of error for the sub-samples in this additional analysis is:

-- 378 Americans who are currently investing in an IRA or participating in a 401(k): +/-5.0

-- 183 Americans who are neither investing in an IRA nor participating in a 401(k): +/-7.2

(2) IRA accounts are subject to a minimum balance charge of $50 per year if, after receipt of notice and a notice period, their assets remain below the account opening minimums of $2,000. The minimum balance charge is waived for accounts of households with balances of at least $10,000 or at least eight equity and/or options trades in the preceding 12 months. Small Business Retirement accounts are not subject to minimum balance requirements.

15-Minute IRA account opening statement applies to opening an IRA and funding it online. Other methods may require additional time.

Charles Schwab & Co., Inc. receives remuneration from fund companies participating in the Mutual Fund OneSource(R) service for recordkeeping and shareholder services and other administrative services. Schwab also may receive remuneration from transaction fee fund companies for certain administrative services.

Trades in no load funds available through Mutual Fund OneSource service (including Schwab Funds), as well as certain other funds, are available without transaction fees when placed through or our automated phone channels. For each trade order placed through a broker, a service charge applies. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds. Funds are subject to management fees and expenses.

This information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. It is not intended to be a substitute for specific individualized tax, legal or investment planning advice. The strategies mentioned may not be suitable for everyone. Each investor needs to review investments and strategies in light of his or her own particular situation. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA and/or attorney.


Charles Schwab
Matt Hurwitz, +1-415-636-3700


Charles Schwab
Matt Hurwitz, +1-415-636-3700