Retirement Education in the Age of a Millennial Workforce
The Importance of Retirement Education
Retirement at 23. Sounds nice, right?
Incredibly so, but saving for retirement takes years of follow-through and consistency. The upside? This gives an edge to Millennials who are just entering the workforce and have decades of time on their side.
You’d think taking full advantage of the company-sponsored retirement plan would be a no brainer for Millennials, right? After all, they’ve likely heard their parents talk about retirement, they face the most uncertainty with Social Security, and they’ll probably live longer. But unfortunately, Millennials seem to be lagging when it comes to putting money away. Why? Generally, they have other financial pressures – like debt, childcare and home ownership.
So, what’s an employer to do?
In 2015, more than one in three American workers were Millennials, becoming the largest share of the American workforce.1 Therefore, employers have their biggest population potentially off track for retirement and distracted by finances.
This is where educational strategy comes in. Although retirement themes have generally remained the same, methods have evolved. I, myself, was around for only 6% of the 20th century.
To engage my generation with early savings and financial education, there are a few things employers should keep in mind:
- Be short and sweet. Engage Millennials without diluting the message in jargon.
- Use technology to offer education. We’ve become so accustomed to having information on our smartphones. It’s easy and already in our hands or pockets.
- Convey the importance of using time. With other financial pressures, we may lose sight of important concepts like compound interest.
- Offer a match. In contrast to previous generations, Millennials have shown to be more likely to change jobs due to compensation and perks.2 Make them count!
- Integrate financial education into a wellness program. In general, Millennials are exercising more, eating smarter and smoking less.3 Wellness matters to Millennials, and it’s a great platform for financial education.
- Provide Health Savings Account (HSA) education. HSAs should be thought of as another method of saving for retirement. With potential for a triple tax advantage, Millennials should be educated on how to strike a balance between traditional retirement vehicles and HSAs to maximize efficiency and saving potential.
For more insight on education strategy, contact Assurance Financial Services.
1Pew Research Center, “Millennials surpass Gen Xers as the largest generation in US labor force.” http://www.pewresearch.org/fact-tank/2015/05/11/millennials-surpass-gen-xers-as-the-largest-generation-in-u-s-labor-force/ [5/11/2015].
2 NBC News, “7 Ways Millennials Are Changing the Workplace for the Better.” https://www.nbcnews.com/better/careers/7-ways-millennials-are-changing-workplace-better-n761021 [5/18/2017].
3 Goldman Sachs, “Millennials Coming of Age.” http://www.goldmansachs.com/our-thinking/pages/millennials/ .
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