Typically, tax season brings a flurry of interest in IRAs as a tax sheltered way of socking away a few extra bucks for retirement. This year, though, well fewer than half of Millennial and Gen X investors will contribute to IRAs compared with over 70% last year.
The sharp drop in interest in IRAs is attributable to economic insecurity. 32% said they were feeling too poor to contribute and 56% said they needed the money for everyday expenses or to pay down debt. 14% cited fears of market volatility and 12% blamed job uncertainty. “Given their economic fears, it is understandable why many younger investors might be unable or unwilling to fund all of their tax-advantaged accounts and are focusing primarily on their 401(k) during this tax season,” said a T. Rowe Price planner.