Fund Firms Try to Lure Gen Y to 401(k)s

Concerned that as the 77 million Baby Boomers, or those between the ages of 42 and 60, begin to retire and draw down their 401(k)s and other retirement accounts that their assets under management will shrink considerably, fund companies are shifting their attention to the nation’s 45 million Generation Y, those between the ages of 18 to 27, The Wall Street Journal reports.Although only about a third of those Gen Y’ers who are working contribute to their 401(k), fund giants are taking innovative approaches to convince them to do so, resorting giving out iPods and music downloads, pizza parties, events with bungee jumping, fake letters from parents, chat rooms an iPod downloads. Fidelity is even developing new products specifically for Generation Y.

In all cases, according to research company Reach Advisors, investment firms are individually spending well into the seven figures.

Cerulli Associates estimates that Baby Boomers withdrew $5 billion from their retirement plans last year and that by 2010, that will increase to $39 billion.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.