Millennials and Retirement

Posted on October 3, 2017

Download For Millennials, retirement means freedom.

The Insured Retirement Institute (IRI) released today the findings from its second biennial report on Millennials and their thoughts about, and preparations for, retirement. With a quarter century until the first of them turn 65, Millennials very much view themselves as “on their own” with regard to retirement income, and are saving for what they see as the biggest benefit of being retired: freedom. More than half of Millennials are making contributions to 401(k) accounts and about four in ten are contributing to personal savings – saving at higher rates than the forty six percent of Baby Boomers and thirty six percent of GenXers with no retirement savings.

Millennial understanding and expectations for retirement are influenced by their lack of confidence in Social Security retirement benefits and the demise of the traditional defined benefit pension. Only a quarter of Millennials are confident they will realize meaningful income generated from these sources.

Key findings from the Report:

  • Millennials want flexibility and choice during retirement: the majority associate the word “freedom” with their feelings about retirement, and 50 percent believe retirement means being able to decide whether, and/or how much, to work.
  • Only one in four Millennials believe Social Security will provide meaningful income during their retirement years, versus 53 percent who believe they will realize meaningful income from a workplace retirement account; among Millennials with a bachelor’s degree or higher this rises to 62 percent.
  • A third of Millennials expect health care costs to be their largest expense during retirement, ahead of housing and utilities (27 percent) and travel/leisure (18 percent).
  • Two-thirds of Millennials have not consulted a financial advisor.
  • Four in 10 Millennials cite trust as their top consideration in choosing a financial advisor, versus 21 percent naming the ability of the advisor to provide services they cannot perform themselves as their top consideration.
  • Nine in 10 Millennials are open to using their parents’ financial advisor(s).