Investors Embrace Taxable Accounts for Retirement Savings

When asked why they waited until 2020 to open a new investment account, 17% of new investors said they wanted to save for retirement, as did 15% of experienced investors.

Investors, by Race

Asian (34%) and white (26%) investors cited retirement as their top reason for opening a new account last year. Latino/Latina (43%) and Black (35%) investors were drawn to the markets by their ability to invest with a small amount. Not wanting to miss an opportunity also inspired investors to jump into the markets: Black investors, 27%; Asian investors, 23%; white investors, 22%; Latino/Latina investors, 17%.

Beyond these areas of consensus, investors had a checkerboard of priorities when opening new accounts in 2020. Black investors were prompted to enter the markets on a friend (26%) or family member’s (20%) suggestion, and nearly a quarter of Asian investors were drawn in with a sign-on bonus.

Investors, by Age

Friends and family are highly influential on younger investors’ decisions. Over half of investors between ages 18 and 29 said they opened a new account because a friend suggested it — significantly fewer followed a family member’s advice (31%). The power of persuasion fell to financial advisors for older investors. Fifty-three percent of investors 60 and older, and 24% of those between 45 and 59, entered the market on an advisor’s counsel. Just 22% of investors under age 44 followed a professional’s advice.

Investors, by Gender

Men reported higher balances on average than women. Thirty percent of men said they had $25,000 or more in their account, compared to 26% of women. Meanwhile, 23% of women said they had less than $500, compared to 15% of men. Women were also more likely to say they didn’t know or didn’t want to say how much they had saved.