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John F. O'Hara

John F. O'Hara
731 W Skippack Pike  Blue Bell  PA 19422
Phone:  610-277-4060
Office:  215-643-3200
Cell:  267-481-1786
Fax:  267-354-6973

My Blog

Few U.S. Workers Contribute to IRAs

March 27, 2015 12:27 am

A recent LIMRA study found that just 17 percent of American workers contribute to a traditional individual retirement account (IRA) – and only 28 percent contribute to any kind of IRA, including traditional, Roth or SEP/SIMPLE accounts. When asked to provide a reason for that decision, the majority of respondents felt they could not afford to contribute to an IRA. Nearly a quarter of respondents said they are saving in another retirement savings vehicle, such as a defined contribution (DC) plan, and one in seven workers said they were unsure how to invest their assets or haven’t gotten around to it. A third of workers believe they don’t understand enough about IRAs to contribute to one.

“For workers who don’t have access to an employer-sponsored DC plan, an IRA provides an excellent way for workers to save for retirement,” says Cecilia Shiner, assistant research director for LIMRA.

The study also found that more than a third of Generation X workers are contributing to an IRA (34 percent), compared to only a quarter of Millennials and Boomers. Forty percent of workers would be more likely to contribute to an IRA if a payroll deduction option were available through their employer; nearly half of Millennials said payroll deduction would spur them to contribute. Workers who own an IRA are more likely to feel confident that they will be able to live the retirement lifestyle they desire (55 percent), compared to just 24 percent of those who don’t own an IRA.

A traditional IRA allows workers to direct pretax income, up to specific annual limits, toward investments that can grow tax-deferred (i.e., no investment gain is taxed until the money is withdrawn).

Source: LIMRA

Published with permission from RISMedia.


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Mortgage Rates Return to Year Low

March 27, 2015 12:27 am

Mortgage rates returned to the lowest point of 2015 this week, a level seen three previous times from mid-January to early February, according to a Bankrate.com survey. Mortgage rates fell for a second consecutive week, with the benchmark 30-year fixed mortgage rate retreating to 3.80 percent.

The average 15-year fixed mortgage dropped to 3.04 percent while the larger jumbo 30-year fixed mortgage plummeted to a new record low of 3.92 percent. Adjustable rate mortgages also lowered, with the 5-year ARM sinking to 3.14 percent and the 7-year ARM sliding to 3.31 percent.

The catalyst was the Federal Reserve's downgrading of economic and inflation expectations for this year, which pushed back the expected timing of an initial interest rate hike. Both bond yields and mortgage rates moved lower as expectations on the timing of interest rate hikes are tempered. Mortgage rates are closely related to yields on long-term government bonds.

One year ago, the average 30-year fixed mortgage rate was 4.51 percent. At that time, a $200,000 loan would have carried a monthly payment of $1,014.56. With the average rate now at 3.80 percent, the monthly payment for the same size loan would be $931.91, a savings of $82 per month for anyone refinancing now.

Source: Bankrate.com

Published with permission from RISMedia.


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