Millennials, more so than other generations, grasp the importance of retirement savings, a survey by Natixis Global Asset Management found.
Sixty-nine percent of Millennials, compared to 55% of Baby Boomers, think workers should be required to save for retirement. Eighty-two percent of Millennials, versus 77% of Generation X, think employers should be required to offer retirement plans. Seventy-six percent of Millennials, compared to 66% of Boomers, think companies should offer matching funds, and 84% of Millennials want investment options that reflect their personal values.
Millennials began saving for retirement, on average, at age 23, while Gen Xers didn’t start until age 27 and Boomers at 31. While 81% of Boomers are counting on Social Security, only 55% of Millennials think it will still be in existence by the time they retire.
Sixty percent of the 951 workers that Natixis surveyed said they have figured out how much they will need in retirement. Boomers think they will need an average of $934,677 and are 34% on the way there ($317,790). Gen Xers say they will need $810,387 and have 24% of their target saved ($194,492), and Millennials have a target of $869,662 but have only 8% of this saved ($69,573).
Forty-one percent of workers save less than 5% of their salaries, and 28% have taken out a withdrawal from their retirement savings. Among Millennials, withdrawals jump to 43%.
“Younger workers in particular are grappling with a different set of retirement challenges, compared to previous generations,” says Ed Farrington, executive vice president for retirement strategies at Natixis. “Their retirement savings strategies are encumbered by a number of factors such as student loan debt, a lack of company pensions and a sense of doubt that Social Security will be a source of income in retirement. Employers would do well to focus on designing comprehensive plans that offer greater incentives and a better range of investment choice that especially appeal to this large portion of the workforce.”NEXT: How many aren’t participating?