401K numbers could be clue for consumer confidence
There is some surprising news about how we are feeling about the state of the economy. According to Fidelity Investments, 401k account balances grew by an average of 4 percent in the third quarter. Financial analyst Richard Rosso explains why that's happening.
“If people are placing money into these longer term tax deferred vehicles then they are feeling a little bit better about their personal situation to do so,” Rosso explained.
Rosso says the stock market is going up, Contributions from employees and employers are going up. And KTRH Money Man Pat Shinn says it’s a sign that the economy is getting stronger.
“With stocks near their highest level in nearly five years, that’s telling us that GDP is back up to where it was in 2007,” Shinn told KTRH.
Shinn says if you aren't in on this yet, get in on it now.
“A lot of people are making the big mistake of not participating in their 401K at all. The second biggest mistake is not maxing out their contributions,” he explained.
And as far as stories about layoffs are concerned, Rosso says people have heard it so many times already that it's not having an impact.
“You’re starting to see households treat the news as the new normal. You’re starting to see people think that layoffs are just the way it’s going to be,” Rosso said.
Fidelity says last quarter, contributions from employees and employers went up last quarter.