NU Online News Service, Aug. 15, 2003, 12:21 p.m. EDT – U.S. workers under age 30 who earn more than $30,000 per year are about as likely as other workers to contribute to tax-deferred retirement plans, according to a report released by the Congressional Budget Office.
Paul Burnham, the CBO official who wrote the the report, uses data from 1997 tax returns to study the effects of tax incentives on retirement savings.
Burnham looks at contributions to individual retirement accounts, 401(k) plans and Keough plans.
He breaks the data down according to the workers’ age, income and marital status.
One table shows that only 35% of workers under age 30 contributed to a tax-deferred retirement plan in 1997, compared with 51% of all workers.
But the results were skewed by the fact that a high percentage of young workers earned less than $20,000 per year.
Burnham found that 53% of workers with incomes between $20,000 and $40,000 contributed to retirement plans, compared with 56% of all workers.