Millennials, also known as the generation of people born between the early 1980s and the year 2000, have a reputation for being difficult in the workplace. In addition to being labeled as a generation that loves taking “selfies” and posting on social media, they’re also accused of being lazy, materialistic, and narcissistic. These assumptions might make employers think Millennials aren’t interested in 401(k)s because this younger group of employees is too lazy to make retirement investments, since they’re spending their income on everything money can buy, and they only care about themselves. But don’t let these broad generalizations fool you. Millennials have proven themselves to be an innovative, adaptable generation. And, contrary to popular assumptions, they’re actually very engaged when it comes to investing in their futures. In 2014 the Transamerica Center for Retirement Studies conducted a survey of more than 1,000 employed Millennials. The results of that survey revealed that Millennials are adept at saving, they’re actively planning for their future retirements, and they’re looking for a top 401(k). According to the survey:
70% of Millennials are already saving for retirement
2/3 of Millennials expect their primary retirement income source will be self-funded through retirement accounts
Millennials who participate in a 401(k) plan(and are offered a company match) contribute 10% percent (median) of their annual pay
These behaviors are anything but lazy, materialistic, and narcissistic. But if you’re still convinced that Millennials — who make up 33% of the workforce — don’t care about asking for or contributing to a 401(k), consider how their up-to-now life experience plays out when it comes to retirement investing.
Millennials’ technological expectations
Millennials’ grasp of technology and all it can do is leading our society into completely new territory. Rather than being lazy, this generation wants to use their time wisely…while they let technology handle the details. Millennials understand technology’s potential and they have expectations about what it should do. Reality: Millennials aren’t lazy…but they do expect that (like everything else) the 401(k) plan offered by their employer will be digitally accessible, easy-to-use, and hassle-free.
Financial collapse of 2008
In the financial crisis of 2008, Millennials witnessed their parents’ distress when the stock market crashed, retirement investments vanished, and unemployment rates skyrocketed. That experience has made their generation acutely aware of the risks involved in planning for retirement. Rather than gathering their money to spend on frivolous things, Millennials seem focused on making informed financial decisions. In fact, three in five Millennials surveyed want some level of advice when saving and investing for retirement. They want to protect themselves from the same fate their parents experienced. Reality: Millennials aren’t materialistic… they want to use their money wisely by making smart, informed choices that will help secure financial stability now, and in the future.
Personal responsibility and long-term planning
It’s no secret that many younger Americans are concerned that Social Security won’t exist when they’re ready to retire. But the millennial generation isn’t just worried about themselves. According to the Transamerica survey, 41% of millennials also anticipate that they’ll need to financially support their parents when they retire. Investing in their own retirement is a means for millennials to uphold the personal responsibility they feel when it comes to their parents and extended family. Reality: Millennials aren’t narcissistic…they’re a generation that understands personal responsibility is required in order to succeed.
What millennials expect from their 401(k)s
If your business employs millennials, it’s important to consider their expectations when it comes to retirement. When asked, 76 percent of millennials said that “retirement benefits offered by a prospective employer will be a major factor in their decision on whether to accept a future job offer.” In order to recruit and retain Millennial talent, employers must look for ways to provide a high-quality 401(k) that meets their employees’ needs. Start by looking for 401(k) plans that:
deliver a digital, easy-to-use interface for participants to manage their investments
provide access to informed advisors who offer personalized investment education
vest immediately and offer low rates
This group of younger employees may indeed love the selfie more than previous generations do. But does that really matter? Millennials contribute to the economy—and to their workplaces— in positive, innovative, and generous ways. And they’re looking for careers they enjoy, workplaces that allows them to do some good in the world, and employers that helps set them up for a secure financial future. Savvy employers will do all they can to entice] this generation of innovative, forward-thinkers to their organizations. Given millennials’ interests and commitment to retirement investing, providing 401(k)s to millennials is a way to do just that. If you’re seeking 401(k) administration that’s friendly for employers and employees alike, check out Human Interest. With best-in-class mutual funds, free-of-charge investment advisors, and easy employee access, the team at Human Interest provides top 401(k) options that meet both employer and millennial needs.
Article ByThe Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment education, and integration with leading payroll providers.