Retirement across the generations: Outlooks and warnings
Posted On September 11, 2014
It’s generally accepted that individuals will need retirement savings of roughly 16 times their pre-retirement salary, and that social security will cover only 4 times salary at most. It is also generally understood that most individuals cannot count on employer-defined plans to fund that missing 11 times salary – but how much is very different by generation.
An Aon Hewitt study reported in Benefits Quarterly predicts that Boomers will be responsible for generating roughly 6.3 times salary out of their own savings while Millennials are faced with a daunting 10.5 times salary gap. The upside, of course, is that Millennials still have plenty of time to contribute, however very few are approaching retirement planning as aggressively as they should.
This presents employers with an opportunity to help their youngest employees to help themselves. Young employees are less likely to have established financial advisor relationships and may not know where to turn for advice, other than their parents and peers. Providing regular retirement planning education can help this important employee base understand their options and be more confident about the future. Demonstrating an interest in their future success – even while knowing how unlikely they are to stay with the same organization for long – will help with their loyalty, both as employees and as future centers of influence.Categories: Financial Services, Generation Y / Millennials, Retirement, Workplace