Is your house your retirement plan?
Rapidly rising home prices during the boom years may have helped lull Americans into a false sense of security about retirement. That's one of the explanations offered for the slowing number of workers investing in 401(k) and 401(k)-like plans during those years, the Los Angeles Times reports:
The number of people investing in 401(k) and similar plans climbed to 50.9 million in 2000, from 42.2 million in 1995, according to the Employee Benefit Research Institute. From there, though, participation rose only to 52.2 million through 2004, the institute said.There are several reasons, including fewer small companies offering plans and lingering investor concerns about the stock market after the bursting of the technology bubble in 2000, said Craig Copeland, the author of the study.
But the preoccupation with housing played a role, Copeland said, as some people earmarked cash for new or remodeled dwellings as home prices surged, instead of funding retirement accounts.
People considered housing to be "the big investment," he said.
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