Who’s worried about retirement? Would you believe millennials?
According to a survey by the National Institute on Retirement Security, 92% of millennials believe the nation is facing a retirement crisis. As to their personal situations, 1 out of 2 are concerned that they will not be able to retire when they want to; 2 out of 3 are concerned about outliving retirement savings.
Does that mean they are taking action to prevent retirement insecurity? Not according to NIRS. Two out of 3 have nothing saved for retirement. Only 5 out of 100 are saving “adequately” for retirement.
Based on another study, some millennials think saving for retirement can wait — but it’s not a majority. Navient’s “Money Under 35” national study found that close to 4 in 10 young adults prioritize “short-term goals like homeownership, saving for vacation, paying down debt or building an emergency fund” over retirement.
It just so happens that I spoke to an audience of millennials last week about this very topic. The setting was the Business Council of Fairfield County’s Emerging Leaders-Financial Planning panel. When I surveyed the attendees (about 30 millennials, average age 27), all of them worked for companies that offered 401(k) plans to employees, most with a match. Eighty-two% maximized that match. They are a select group that is on the right path to retirement security.
A broader sample is also encouraging. According to a survey by the Transamerica Center for Retirement Studies, 73% of millennials who are offered a 401(k) at work participate in that plan.
What about those who don’t have the benefit of a company retirement plan? According to a recent study done by the FINRA Investor Education Foundation and the CFA Institute, many of the millennials who do not invest at all don’t work full time (56% of those surveyed); 16% are working but have no employer retirement plan option available to them. The rest (28%) work full time, are eligible for an employer-sponsored plan but don’t participate.
The NIRS survey highlights the reasons why millennials are not participating in their 401(k)s. A large percentage said they are not eligible (not enough hours or did not work long enough); 9.3% said they could not afford to contribute; 8% admitted they didn’t think about contributing; 4.8% didn’t want to “tie up money” for retirement.
Of those surveyed, the majority work for employers that offer plans with a match. That’s a sign of a problem in educating employees about the benefits of 401(k)s, something that I encourage families and friends to do, as well as employers. If you already are serving as a mentor to 401(k) participants, be sure to sign up for the 401(k) Champion Award, which I sponsor: juliejason.com/award/apply.
My editorial assistant, Kari, a millennial, noticed #MillennialRetirementPlans trending on Twitter Tuesday morning and watched as the number of related tweets soared.
The reason: a midnight hashtag roundup game led by @Radstags, according to Forbes.com writer Asia Martin. The game lasted under an hour. Responses were still going strong 12 hours later. “So it’s fair to say that #MillennialRetirementPlans hit a nerve,” said Martin.
It’s clear that while millennials are thinking about retirement, they feel unable to prioritize and start saving for it.
To read Martin’s recent Forbes post about #MillennialRetirementPlans, go to https://tinyurl.com/y32tqkto.
To see the NIRS survey, “Millennials and Retirement: Already Falling Short” by Jennifer Erin Brown, go to https://tinyurl.com/y795ga9b.
For the FINRA/CFA Institute study, “Uncertain Futures: 7 Myths about Millennials and Investing,” go to cfainstitute.org/-/media/documents/support/advocacy/1801081-insights-millennials-and-investing-booklet.ashx.
If you are, indeed, a Twitter user, let’s connect. Follow me at @RetireSecureNow.