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Addressing Gen Y Barriers to Retirement Savings Thumbnail

Addressing Gen Y Barriers to Retirement Savings

Employers tend to direct retirement education toward those who will soon exit the workforce—Baby Boomers and Gen Xers. That makes sense considering the nearness of retirement for those groups. But it’s the Millennials who now make up the largest constituency in the American workforce, at 1 out of every 3 workers. And it seems they need a little help when it comes to saving for their eventual retirement.

The Young and the Rest-less

The National Institute on Retirement Security found that 2/3 of Millennials have not saved anything for retirement.[1]  

Addressing the unique challenges Millennials face in saving for retirement is important for American businesses struggling to attract new workers. Among the challenges is, of course, student loan debt—but there are others. Housing costs are identified by 37% of Millennials as the primary reason they can’t save enough for retirement, with 21% citing student debt. Whatever the reasons, there are things employers can do to help. Here are a few to consider:

  • Targeted financial wellness education. Break down your employee population into segments, by age, career stage, family status, etc. That way you can address specifics in your financial education, which may offer employees the information they need at just the right time.
  • Keep social responsibility in mind. This is a subject often near to the hearts of younger workers. Consider including ESG (Environmental, Social and Governance) funds among your retirement plan’s investment options.
  • Access to personalized investment advice. In spite of their reputation for doing everything electronically, Millennials appreciate personalized financial advice. Check with your plan advisor to find out how to incorporate it without violating the prohibition against providing it yourself.
[1] National Institute on Retirement Security, Millennials and Retirement: Already Falling Short, February 2018, https://www.nirsonline.org/wp-content/uploads/2018/02/Millennials-Report-1.pdf