SAN FRANCISCO, Feb. 27 /PRNewswire-FirstCall/ -- Can forgoing a "happy
hour" help you have an even happier retirement? Can hiring a DJ instead of
a live band for your wedding help you make the most of your golden years? A
new survey by Charles Schwab & Co., Inc. suggests young investors may not
be taking advantage of simple choices to help them balance their short-term
spending needs with their long-term savings goals.
Schwab surveyed over 500 Americans between the ages of 25 and 40
regarding saving, spending and retirement.(1) The study found people in
this age group know they should be saving for retirement, but face
significant challenges like competing spending priorities and a lack of
information to make simple investment choices.
"It's great to see 20- and 30-somethings at least acknowledging they
need to start saving for retirement," said Carrie Schwab Pomerantz, chief
strategist for consumer education at Charles Schwab & Co., Inc. "Our job is
to help them get beyond the roadblocks to saving with advice and services
that make it easy."
Easy Ways To Save
According to the survey, nearly one out of four (24 percent) people in
this age group feel they don't have enough money to open or invest in an
IRA. With this in mind, Schwab offers a few simple tips to help consumers
find the extra cash:
BUYING A CAR? FORGO A FEW FEATURES
* Next time you're in the market for some new wheels, consider giving up a
feature or two -- such as leather seats, or the deluxe audio system --
and put the money you save into an IRA.
ALLOCATE A PORTION OF YOUR RAISE TO RETIREMENT
* If you're about to get a pay raise in 2007, or just received your raise,
try living the remainder of the year as if you hadn't gotten one. When
the raise comes through, put at least half of the extra income directly
toward retirement savings by increasing the percentage you contribute to
your 401(K) or by setting up a direct deposit into an IRA. Likewise, you
might be tempted to celebrate a new job by splurging with your signing
bonus. Resist the urge (or scale back the celebration), and put some or
all of the extra money into your retirement account.
BE PENNY-WISE WHEN PARTYING
* How many nights did you "go out" last month? It's easy to spend between
$50 and $100 per night at trendy restaurants, bars or clubs. By cutting
out just two party nights per month, you can make progress toward
funding an IRA. For those slow nights, read a book, rent movies or
entertain friends at home.
CUT BACK ON A FEW WEDDING EXTRAS
* Some couples go all-out when it's time to tie the knot, but there are
some simple ways to save money and still have a dream wedding. Hire a DJ
instead of a live band; skip the $1,000 designer dress and buy a look-
alike for less than $500; and go for the deluxe Maui honeymoon instead
of the luxury package.
MAKE YOUR BUNDLE OF JOY A BUNDLE OF SAVINGS
* Some new parents tend to shop at high-end stores to buy everything --
from the crib, to the stroller, to the diaper bag and blankets. Instead
of shopping at high-end department stores, consider premium discount
stores to find less expensive items, and earmark the savings for your
retirement account.
SHARE YOUR SEASON TICKET
* Are you a sports season-ticket holder? Sharing a plan with another fan
for just one year can pay off big-time. For example, a pair of lower box
seats to watch the San Francisco Giants in 2007 will cost more than
$5,500. Split the schedule with a friend this year, and you'll have
plenty of extra cash for your IRA.
BUY FASHIONABLE YET FRUGAL FURNISHINGS
* Moving into a new apartment? Shop at a discount furniture store and
spend less than $1,000 on a sofa instead of two or three times as much
at a brand-name store. Put the difference toward an IRA.
Seeking Simpler Solutions
Almost half of those surveyed by Schwab 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. Schwab's recently
launched "15-Minute IRA" makes it quick and simple for people to open and
fund an account online, and at the same time select a fund that targets
their retirement date or choose from a wide range of other investments. The
four- step online process helps the consumer quickly identify which type of
IRA to choose, complete the application, make a contribution, and select an
appropriate first investment.
The Schwab IRA provides access to a wide range of investment options,
from Schwab Target funds to thousands of no-load, no-transaction fee mutual
funds, as well as stocks, bonds, CDs and more. The minimum to open an IRA
is $2,000, and there are no account service fees.(2) IRAs can be opened by
visiting http://www.schwab.com/OpenIRA, calling 1-800-398-9609 or visiting any
Schwab branch.
INVESTORS SHOULD CONSIDER CAREFULLY INFORMATION CONTAINED IN THE
PROSPECTUS, INCLUDING INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES.
YOU CAN REQUEST A PROSPECTUS BY CALLING SCHWAB AT 1-877-658-4135. PLEASE
READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. INVESTMENT VALUE MAY
FLUCTUATE, AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
ORIGINAL COST.
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, http://www.sipc.org),
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, http://www.sipc.org) is an
electronic trading technology and brokerage firm providing services to
highly active, online traders. More information is available at
http://www.schwab.com. (0207-5609)
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 is 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.
(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 minimum 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 schwab.com 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.
SOURCE Charles Schwab
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Related links:
http://www.schwab.com/
CONTACT:
Matt Hurwitz of Charles Schwab,
+1-415-636-3700, or matt.hurwitz@schwab.com
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