Millennials, you’ve read about them, they may even inhabit a good part of your workforce. Millennials are bright eyed and bushy tailed, and for the most part uninformed about their retirement options.
Sure they know a lot about evolving technology and social platform etiquette, but what do they really know about benefits, retirement plans and fixed incomes?
What do they know about preparing for the future? We have put together a list of 5 stats to scare your Millennials into caring about retirement planning.
1. Longer Retirement Can Only Mean One Thing…
According to the Employee Benefit Research Institute, only 51% of workers have employers that contribute retirement plans.
The Millennial generation is projected to live longer than previous generations. Seventy-three is projected to be the average retirement age of Millennials. What does this mean for retirement planning?
Millennials will need to budget for a retirement that is longer than the number of years they end up working. Subsequently a longer retirement means Millennials will need to save more money.
Many financial advisors project that Millennials should have a target goal of $1 million saved for retirement.
2. Average Student Loan Dept is Deeper
Student loan debt, In 2014 a Millennial graduating from college owes an average of $33,000 in student loans.
With the influx of student loans, Millennials are often focused on paying off debts in order to live a somewhat normal life. Many are so focused on paying off student loan debts, they forget to plan for the future bottom line. For most people their twenties and thirties are the absolute pivotal time for saving up for retirement.
The average student loan debt in 2014 was $33,000.
Student loans can be a daunting aspect of the Millennials life. There are many different programs/plans that can help anyone schedule, plan and save for the future.
There are many different ways a person can budget their life, check out some of these easy apps, built specifically for easy budgeting.
3. Fear of Salary Negotiation
84% of employers said entry-level candidates would not put their job offer in jeopardy by attempting to negotiate on their starting salary.
Not enough Millennials negotiate their starting rate. Many employers say they have no problem with Millennials inquiring about more pay.
So why aren’t Millennials taking advantage of this, especially with their waning retirement hanging in the balance? Minimal knowledge of financial literacy.
“While more Millennials are attending college, they are less financially literate than older generations. This low level of financial literacy makes Millennials ill-prepared to make critical financial decisions.”- Damian Davila (@daviladamian), writer, wisebread
Less and less employers offer traditional pension plans, in fact only 7% of employers do. Millennials need to look into their financial future, bone up on some basic financial facts even if that means watching Ted Talks.
4. Unemployment Rates
8.5% of recent college graduates are jobless.
Advancing over the unemployment hump is a task in itself, coming off the recent recession has certainly affected job opportunity for Millennials.
“The after effects of being unemployed are significant and long lasting. Economists have found that young people who are unemployed for six months or longer earn about $22,000 less than expected over the next 10 years as a result of having a deficit in experience—and lower wages mean lower savings for those who were once unemployed.”- Ben Schwartz and Sarah Ayres Steinberg, writers for American Progress
5. Voter Rates Declining
Only 23% of voters under the age of 30 are planning to vote in the midterm elections.
“Low voting rates for young adults is not a new trend. According to the U.S. Census Bureau, people between the ages of 18 and 24 have voted in presidential elections at consistently lower percentages than any other age group. Their participation has steadily decreased since 1964, with spikes in participation for the 1984 and 1992 elections. The demographic reached a 30-year high in 2008, with 44.3 percent of that population turning out for Barack Obama’s election.” – Abby Johnston, writer, Vox Magazine
Without a voice, Millennials have little room to improve their financial outlook. Yes, most of the financial responsibility lies within the Millennials ability to plan for their financial future.
However, without a voting presence, Millennials can miss out on key factors that play a major part in their financial future.
While it seems harsh, you must splash a cold bucket of water onto your Millennial employees about the realities of an unprotected future. Contact The Olson Group, we can help create a plan for your company that will get everyone on the right track.