Millennial workers are a digital do-it-yourself generation of retirement savers, Transamerica said. Eight in 10 are concerned that Social Security will not be there for them when they are ready to retire. Unlike their parents’ generation, many expect their primary source of retirement income to be self-funded through retirement accounts.
This generation is getting an early and strong start with their retirement savings, but they need to learn more about investing, and they are eager to do that, the study said.
Of those who are saving, they began at a median age of 24, which is younger than older generations do. Among those who are participating in a 401(k) or similar plan through their employers, the median savings rate is 10 percent of their annual salary.
“A clear opportunity for millennials is to get savvy about their savings,” Transamerica said. “One in four who are saving say they are not sure how their retirement savings are invested. Some good news is that 76 percent of millennials, including both retirement savers and non-savers, would like to receive more information and advice from their employers on how to achieve their retirement goals.”
More Gen Xers (57 percent) and baby boomers (55 percent) said their biggest fear in retirement is outliving their savings, while for millennials (47 percent) the biggest fear is not being able to meet basic financial needs. As workers age, the fear of suffering from declining health that requires long-term care increases.
Despite the fact that many retirees are working in retirement and those nearing retirement plan to continue doing so, ageism is a concern in today’s society, Transamerica said. Eighty-four percent of all workers share positive perceptions about older workers. However, more than half of workers (54 percent) have one or more negative perceptions, such as older workers having higher health-care costs (a concern shared by 28 percent of respondents) and being less open to learning and new ideas (a view held by 19 percent). “Therefore, it is important for workers, especially older workers, to be aware of these perceptions and strive to overcome them,” the study said.
“Financial advisors have a tremendous opportunity as workers rethink retirement,” said Collinson. “Advisors can ask the tough questions to determine if the clients are on track for retirement and how long they think they will live. Are they taking proactive steps to ensure they can work as long as they want?
“There has to be some tough love from advisors,” she said. “For instance, all three generations say they want to pay off debt. Advisors can help them do that and save at the same time.”