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5 Retirement Myths About Millennials

New research challenges generational assumptions about employees who participate in defined contribution plans.

The research, from State Street Global Advisors (SSGA), the asset management arm of State Street Corp., surveyed plan employees aged 22-50 — a group that SSGA calls “Generation DC” and which, SSGA maintains, is the first cohort to rely predominantly on a DC plan as their primary source of retirement funding.

The SSGA research identified five myths about Millennials.

Myth 1: Millennials would rather interact with apps than humans

Though Millennials (aged 22-32) are most likely to say they want apps to help them prepare for retirement, they also want an annual human interaction — even more than older employees do. Nearly 6 out of 10 (59%) of those aged 22-25 say they “want an in-person meeting once a year and technology isn’t really going to help.” Just 38% of Gen Xers aged 45-50 shared that sentiment.

Myth 2: Millennials don’t care about planning for retirement — it’s too far away

SSGA says that 88% of Millennials agree it’s important to start saving for retirement early, a sentiment shared by Gen Xers (86%). Both Millennials and Gen Xers (aged 33-50) agree that saving for retirement is a priority (83%).

Myth 3: Most people are “over” the financial crisis

More than half of Millennials (54%) admitted that their parents’ experience with the financial crisis that began in 2008 has affected their confidence as investors.

Myth 4: Employers hold the reins when it comes to informing and influencing employees

Friends and family come first when it comes to influence. In fact, the SSGA research notes that two-thirds (68%) of Millennials said that friends and family are the ones who told them to start saving. Additionally, more than 90% indicated that their spouse/partner’s annual salary played an important role in their financial well being.

Myth 5: We need to educate people more about retirement and investing

SSGA used a standard battery of questions to test literacy and the results indicate that as people hit their 40’s their literacy about basic financial and investing improves. For example, when asked if buying a single company stock provided a safer return than a stock mutual fund, 46% of Millennials correctly answered that the individual stock was more risky, while 57% of Gen Xers answered correctly — a number that that increased to 77% for the age 45+ group.

The survey was fielded in partnership with Boston Research Technologies, an independent marketing research firm. Data were collected in October 2015 using a panel of 1,500 U.S. workers, aged 22-50, who were employed on at least a part-time basis and were offered a DC plan by their employer.

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