5 myths about millennials and retirement
June 15, 2015 11:34 AM
Overview:
If you think millennials are a generation of young workers who cant be bothered to save for retirement, think again. Fidelity Investments brought together four retirement plan sponsors from different industries and spent six months talking about how to encourage millennial employees to better understand, appreciate and take action in their retirement plans. The project uncovered the following five myths employers and their advisers should be aware of to better engage and empower their growing millennial workforces:
Myth No. 1: They dont think about saving for retirement. They dont view it as important.
Reality: They know it is important, even though retirement is so far away. And, in fact, Fidelity says they face a new generational challenge in that many millennials are freelance workers who dont have access to workplace savings plans.
WHAT TO DO: Fidelity suggests helping millennial workers prioritize their needs. Advisers should stress the importance of establishing an emergency fund, paying off debt and saving for retirement, the firm says.
WHAT TO DO: Fidelity suggests helping millennial workers prioritize their needs. Advisers should stress the importance of establishing an emergency fund, paying off debt and saving for retirement, the firm says.
Myth No. 2: They just want an app, and they get all their information from social media.
Reality: Yes, there is an app for everything, but Fidelity says its testing showed this isnt what millennials want. Because they do understand the importance of savings, they want to talk to someone they know and trust who can guide them. For financial decisions, social media is not the preferred or trusted source, Fidelity found. In fact, for some information, it is a turn-off.
WHAT TO DO: Employees should be offered the chance to talk with someone, such as a benefit or financial adviser, who can help teach and guide them in a more personalized way.
WHAT TO DO: Employees should be offered the chance to talk with someone, such as a benefit or financial adviser, who can help teach and guide them in a more personalized way.
Myth No. 3: With helicopter parents, they expect other people to solve their problems.
Reality: The millennials Fidelity says it spoke to did not want someone to solve their problems for them. Instead they were looking to make their own choices and have face-to-face conversations with colleagues experienced in everything from retirement planning to career development.
WHAT TO DO: Offer clear, actionable education and guidance to help young workers make the best choices.
WHAT TO DO: Offer clear, actionable education and guidance to help young workers make the best choices.
Myth No. 4: They dont trust their employers or think of them only as a pit stop.
Reality: Interestingly, when asked about where they would like to get guidance around savings and retirement decisions, millennials said they would welcome getting this information from their employers. If their employer or manager tells them something is important, they will tend to listen a little more closely, Fidelity found.
WHAT TO DO: Dont give up on important messages. Vary how and when you deliver them, and millennials ultimately will pay attention.
WHAT TO DO: Dont give up on important messages. Vary how and when you deliver them, and millennials ultimately will pay attention.
Myth No. 5: They know it all.
Reality: This group will willingly admit they dont know it all and would be happy to learn from someone. However, dont tell them what to do; they want directional help, Fidelity advises.
WHAT TO DO: Give them a few good, frank choices to pick from. And, equally important, put it in bite-size chunks they can take action on and feel like they are making progress.
WHAT TO DO: Give them a few good, frank choices to pick from. And, equally important, put it in bite-size chunks they can take action on and feel like they are making progress.
