Episode Transcript
[00:00:00] Speaker A: Hi there. Welcome to another episode of Investment Insight presented by McKay Wealth Advisory. I'm Brad LeCovert sitting down today with Brent McKay. Brent, one of the things we talk about are the power of 401ks are people using those and actually saving those in 401ks right now.
[00:00:14] Speaker B: So it's pretty exciting. So we're actually starting to see investors, even though the market has been very volatile in the first part of 2025, is we're starting to see people actually save a good amount of money. So a lot of people don't realize that, hey, just want to save the company match. So the company matches 3%. You know, they match 50% of 3. I put my 6, I get 3. Well, 9% is probably not going to get you to your retirement goals. And so one of the things that we saw recently was 401k savings rate hit 14.3%, a record savings rate. And IRA contributions increased 4.5% year over year. So we're starting to see people save money. Now. The college of financial planning would say that you need to save 15 to 20% of whatever you put back for retirement. And most people don't get to pick when they retire. Health or other issues determine when you're going to retire. So make sure you're saving enough Money. The average 401k balance was $121,983 in the last quarter, which was down about 4%. And the average IRA bounced about 115,000, down about 2%.
But what we are seeing is because of some law changes, because of the idea of, hey, as you get a pay raise, the auto, you know, increase in savings, it does appear to be working. And we're seeing people finally start to save money to the point where they can actually potentially retire.
And then some other Data points were 17% of savers increased how much money they were saving, 6% decreased how much they were saving, and then 6% adjusted their asset allocation. Now, one of the biggest things we offer at our firm is we like to look at how your money is balanced. It's very, very easy over time for your 401k to get out of balance. And so we want to make sure that you're saving the right money. We also want to make sure you're putting it in the right places.
And so that's a big thing to do right now. But the positive is people are still saving money, and that's a good thing. But remember, 15 to 20%, that's what we should be shooting for.
[00:02:07] Speaker A: Awesome. Brent thanks for sharing some really exciting news. Glad that people are taking advantage of that opportunity. Thank you for joining us. Be sure to like and subscribe to our Facebook and YouTube pages to stay up to date on all of our educational content. Thanks for joining us. We'll see you next time.
