Think baby boomers are the only ones agonizing over their retirement prospects? Think again. It appears 20-something Millennials – those between the ages of 20 and 29 – are just as fretful.
Transamerica Center for Retirement Studies (TCRS) and Aegon recently collaborated on a survey of workers in their 20s in 12 countries across the globe. What the responses reveal is that many in that age group are worried about their golden years, but have yet to make saving for retirement a top priority.
Conducted earlier this year, “The Changing Face of Retirement: The Young, Pragmatic and Penniless Generation,” is based on the responses of 2,722 people in their 20s living in Canada, China, France, Germany, Hungary, Japan, the Netherlands, Poland, Spain, Sweden, the United Kingdom the U.S.
More than half – 59 percent – of 20-something workers in those countries said they expect to be worse off financially than their parents’ generation. That percentage was slightly lower in the U.S. at 51 percent.
However, 57 percent concede they have yet to make saving for retirement a priority at this time in their lives even though they agree it’s important to do so. In the U.S., 55 percent of 20-somethings said they haven’t gotten around to building up their nest egg for retirement.
On the plus side, 35 percent of Millennial employees in the U.S. and 25 percent globally characterize themselves as “habitual savers” who are actively saving for retirement.
Pay me more and I’ll save more
When asked what measures would nudge them to save more for retirement, 57 percent said a pay raise would help. In the U.S., 67 percent of 20-something workers said they would be encouraged to stash away more dollars for their golden years with higher pay.
Another factor that would encourage younger workers to save is a more generous matching contribution by employers to their workplace retirement plan. Broken out by country, 44 percent of Canadians in their 20s support a higher defined contribution plan match, followed by Americans (39 percent). Swedes were the least likely to be motivated by a better match at 25 percent.
Simpler, easier-to-understand investment products were also cited as one method to get younger workers to save. That idea was favored by 24 percent of all respondents and 32 percent of U.S. workers.
In conclusion, Catherine Collinson, president of TCRS said in a statement that “future retirement shortfalls among 20-somethings will likely be due to a lack of opportunity to save rather than a lack of will.”
Taking care of Mom and Dad
When they envision their golden years, a good portion of 20-somethings anticipate taking care of an aging parent. Overall, 28 percent foresee supporting their parents financially during their own retirement. One-third of Americans expect to provide such aid, as did Chinese (47 percent), Polish (39 percent) and German and Hungarian (both at 31 percent) 20-somethings.