This content was written by Paula Zaher, TSA Consulting GroupToday’s work place is now made up of three generations of employees: Baby Boomers (born 1946-1964), Generation Xers (born 1965-1978) and Millennials (born 1979-2000). Though they all share the goal of retirement, each generation has different thoughts on saving for retirement.
Despite the general perception that many workers in the Millennial generation are lazy, they are actually better savers than either Generation X or Baby Boomer employees.
According to the Transamerica Center for Retirement Studies® (April 2019) report,
What Is “Retirement”? Three Generations Prepare for Older Age 19th Annual Transamerica Retirement Survey of Workers, Millennial employees start saving for retirement at a median age of 24, with seventy-one percent contributing to an employer-sponsored retirement plan. The report states “more than half expect their primary source of retirement income to be self-funded through retirement accounts (e.g., 401(k)s, 403(b)s, IRAs) or other savings and investments.”
In contrast, Generation Xers are the least prepared for retirement. Unlike Baby Boomers, who see Social Security as a significant source of retirement income, Generation Xers—along with Millennials—are not as confident that collecting Social Security will be a retirement income option, leading to more employees planning on having to work much longer than their predecessors.
As the first generation to have access to Individual Retirement Accounts (IRAs), Generation X workers are defined by the Transamerica report as the “Silently Struggling [IRA] Savers Generation.” While many are contributing to company-sponsored retirement plans, they are not saving enough. Many lack the understanding of retirement planning and how best to invest their contributions. Likewise, Millennials admit to not knowing as much about their investing options as they should.
With the average lifespan increasing each year, it is important that all generations are prepared to meet the financial challenges of retirement. Employers can help their workers stay on track by increasing awareness of retirement savings options and encouraging participation in an employee-sponsored plan.
Contact Rhonda Wood at 850.226.7688 ext. 1317 or rwood@tsacg.com with questions.#HRandBenefits