Millionaires say it’s more important for a beginning investor to contribute to a retirement plan than buy a house, according to a recent survey by Spectrem Group.
More than 93 percent of investors with a net worth of $1 million to $5 million (excluding primary residence) say it’s important or very important for beginning investors to put away a percentage of their salary each month, said Spectrem, a Chicago-area market research firm. An even higher percentage – 97 percent – say it’s important or very important for beginning investors to take advantage of their company 401(k) and to make sure they take full advantage of any company match.
Homeownership is not seen as nearly as important as saving and contributing to a 401(k). About 66 percent of the millionaires said it was important or very important for a beginning investor to buy a home.
“These current sentiments reflect the widespread concern among investors - even those with millions of dollars, - that they won’t have enough money for retirement,” said Catherine McBreen, Spectrem’s managing director. “At the same time, many investors have seen their home lose value and have lost confidence in the housing market.”
The housing market remains in a slump that has already lasted 57 months, according to the National Association of Home Builders. In contrast, 401(k) accounts have recovered much of the deep losses incurred during the Recession.