Generation Y taking Action to Save
According to a LIMRA survey, Generation Y employees (generally those now in their mid-20s to mid-30s) seem to be more confident about their retirement savings efforts than in the past. Only 25% of respondents in this age group are concerned about having saved sufficiently for retirement.
In fact, 21% of those identifying themselves as Generation Y said that they are very confident that they will enjoy a financially secure retirement.
Almost half of “Gen Y” survey participants reported that their primary source of financial information is their parents and other family members. One-fourth noted that they have learned from the mistakes of others.
Gen Y learned from 2008 crisis
While many Americans had a rude awakening during the 2008 financial crisis, it appears that Gen Y learned more and took more positive actions after the crisis than those in other age groups.
Similar results were found in Fidelity Investments’ Fidelity Five Years Later Research report, which studied investors’ attitudes and behaviors five years after the 2008 financial meltdown. Results indicated that more than 80% of Gen Y now view themselves as more knowledgeable about their finances, versus 66% of older age groups. More than half (55%) feel greater confidence as investors. And two-thirds of Gen Y respondents are now saving more on a regular basis.
Financial decision-making is different
Investing and financial decisions seem to be made differently by Gen Y than older generations, Fidelity reported. For example, as the LIMRA survey indicated, Gen Y respondents were more likely to consult family and friends for financial guidance than other age groups. They were also more likely to pursue research online and use online calculators and other tools.
Gen Y is also focused on saving. One-third of Gen Y respondents had increased their liquid assets, and almost 40% had increased their contributions to retirement savings accounts.
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Kmotion, Inc., P.O. Box 1456, Tualatin, OR 97062; 877-306-5055; www.kmotion.com
© 2014 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance, nor as the sole authority on any regulation, law, or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.