Fifty-one percent of the respondents said, “If I could possibly live to be 100 then maybe I do need to be more planful about the way I spend money and also the way I save money,” Libbe says. “I think the way this could change the financial services industry is that all we ever talk about is you need to save for retirement and you need to start saving for retirement when you’re 20 years old. Well, a 20-year-old can only see about five to 10 years in front of them. So we’re sending them a message that’s totally not motivating to them: ‘So you want me to save money that I can’t use for 40 years? Uh-uh.’
“So maybe we should be reframing the issue,” she says. Instead, she suggests, if they want to travel, move to another state or take some time off to find themselves—something more likely to happen in five to 10 years—maybe they should be saving for that. “So don’t think about it as money you can’t touch until you’re 65.”
What does that mean for 401(k) plans? While she says matching funds are something to take advantage of, “maybe there’s a good argument to say you shouldn’t put it all in a qualified plan because if you do have that opportunity to move across country and look for another job or something like that you’ve got a cushion of money to do that.” Or perhaps they want to save to be stay-at-home parents.
Libbe says these discussions are cues advisors could use with younger clients that could motivate them more than the far-off-sounding, abstract concept of retirement.