Myths about certain groups of workers — namely, GenXers and millennials — are impeding the understanding of employers about how those workers engage with their defined contribution plans, making the plans less effective.
So says new research from State Street Global Advisors, which found “surprising similarities” between the two age groups—a demographic that SSGA has christened “Generation DC” because it is the first cohort to rely predominantly on a defined contribution plan as their primary source of retirement funding.
In a survey it conducted on plan employees ages 22–50, the company said that, regardless of respondents’ ages, more than 80 percent of employees understood that creating a successful retirement depends on making it a priority and starting early.
Here are five myths about the demographic that SSGA says need to be debunked so that retirement savings plans will be more successful.
Myth No. 1: Millennials would rather interact with apps than with humans.
Not true, says SSGA.
They want the apps, sure, but when it comes right down to it, at least once a year they want to interact with a living, breathing person — even more than older employees do, according to the research.
While 38 percent of GenXers ages 45–50 want that human interaction, 59 percent of those ages 22–25 say they “want an in-person meeting once a year and technology isn’t really going to help.”
Employers, says SSGA, need to pick up on that and realize that the younger folks need a human hand at the tiller when it comes to steering them right on retirement.
Myth No. 2: Millennials don’t care about saving for retirement, because it’s too far into the future to worry about.
Also not true.
In fact, 88 percent of millennials agree that it’s important to start saving early for retirement.
Among Gen Xers, that number actually falls to 86 percent. Both groups, however, agree that retirement saving is a priority, with a combined average of 83 percent.
SSGA suggests that employers work on tying that awareness to specific actions for employees, such as plan enrollment or increasing contributions.
Myth No. 3: Most people are “over” the financial crisis.
So not true.
Among millennials, 54 percent say that the scars of their parents’ experience during the financial crisis of 2008 has hit their confidence as investors.
Respondents ages 33–39 have been marked even more severely; 60 percent report that they’re still shaky about it.