During a hectic November afternoon at the office my phone rang. Although I am well versed in pleasantly explaining to telemarketers that I do not make decisions about new office equipment purchases and I sometimes speak for the whole office (let me know guys, if you are not happy) and say that we are perfectly content — in fact, sufficiently quenched — with our water cooler supplier, I sometimes get wary about answering the phone when an unidentifiable number pops up on the screen.
This time, however, I picked up and a pleasant, energetic man with a mutual financial services company introduced himself. The company shall remain unnamed in this blog. Now, as an editor who covers this industry I am used to getting phone calls — but usually from someone in the carrier’s communications department — and this gentleman identified himself as a producer. In any event, he asked if he could pay me a visit at our office and I obliged.
When — let’s call him Carl — arrived, he had with him a meaty stack of literature from his carrier and I ushered him into our conference room to hear what he had to say. As it turns out, Carl was not here to pitch a story or try and get his carrier’s name in the media. In fact, he had no idea we produced National Underwriter or Lifehealthpro.com. Carl must have found some background information on me and headed on over to sell me retirement products and long-term care insurance. He was a little embarrassed when he realized where he was but he kept on with his sales pitch. I liked him.
I arrived at the conclusion that Carl did not pick my name out of hat, as he asked to speak with no one else in the office. I was 28 at the time and he must have felt that I would be the perfect candidate to purchase a retirement product that would operate in conjunction with my employer-sponsored 401(k). New data from LIMRA Retirement Research shows that there are 51.1 million Millennials (Gen Y) in this country, 65 percent with some kind of employer-sponsored defined contribution plan and only 31 percent with an IRA or any supplemental retirement plan.
Where the opportunity lies for carriers and producers is that according to LIMRA, Millennials — even at such a young age — identify retirement as the number two reason for saving, falling only behind vacations and travel. Bear in mind the fact that 66 percent of them are single and the conclusions are striking. It is not a shock that single, young, working people view travelling and vacations as a top reason for saving but it does say something about the mindset of this generation that saving for retirement is a close second and more of a priority than saving for education costs, large household purchases and home improvements and repairs. Retirement is a blurry image on the horizon for these folks. For many, it is 40 years away.
Now, we can draw our own conclusions as to why this is the case. Many Millennials have witnessed first hand the outcome of the decline of defined benefit plans and the migration to defined contribution plans as their parents were the guinea pigs of the this movement. They have also watched the Great Recession from a front row seat and have seen both factors culminate in many Baby Boomers postponing their retirement.