New Study Reveals Millennials’ Knowledge Gap on Retirement

Insured Retirement Institute and Center for Generational Kinetics Report
that Gen Y is at Financial Risk

WASHINGTON–(BUSINESS WIRE)–The majority of Millennials are saving for retirement, but does that
mean they’re on track to enjoy a financially secure retirement?
According to a new national study
recently issued by the Insured
Retirement Institute
(IRI) and the Center
for Generational Kinetics
(CGK), Millennials are falling short when
it comes to planning for retirement, and this might have some big
implications for their future financial security.

The report
found that while 68 percent of Millennials – Americans aged 20 to 37 –
said they are saving for retirement, only 29 percent indicated they are
actively planning
for retirement
. At the same time, many Millennials may be developing
unrealistic expectations about life in retirement. For example, the
report found that most Millennials seriously underestimate how much
money they will need for their golden years. Seven in 10 Millennials
said they will spend less than $36,000 per year in retirement, which is
30 percent less than the current national average – $46,757 – for those
aged 65 to 74.

“This study debunks the myth that Millennials are not thinking about
retirement,” said Jason Dorsey, Millennial Expert and Chief Strategy
Officer of Center for Generational Kinetics
, who recently presented
the research findings during a standing-room only event on Capitol Hill.
“However, Millennials are taking a much different approach to retirement
planning than previous generations, and it’s not a very realistic one.
There’s plenty of time for Millennials to get back on track, but it will
require them to take a more active role in the planning process.”

More than a quarter of Millennials participating in the study said they
are counting on either winning the lottery or receiving gifted money to
fund their retirement years. In addition, 56 percent of Millennials
believe they will not be able to retire when they want to, with 28
percent thinking they will never be able to fully retire. Moreover, the
majority of Millennials said that planning for retirement is more
difficult than maintaining a diet.

“These sobering statistics seem to be indicative of a generation that is
struggling to manage competing financial demands,” IRI President and
CEO Cathy Weatherford
said. “Many Millennials are still juggling
student loans and other debts, and so planning for retirement is not
their top financial priority yet. But preparing for retirement is a
career-long enterprise, and Millennials will be well-advised to start
focusing on the task sooner rather than later. To get started,
Millennials should determine a savings goal and develop a plan to get
there.”

The report offered tips to Millennials to help them better prepare for a
financially secure retirement.

  1. Save each month for retirement and invest your savings. Even small
    amounts will build up and grow over the course of a career.
  2. Commit a percentage of your earnings to your retirement savings rather
    than a fixed amount. As your income grows over time, your retirement
    contributions also will increase – allowing your savings to build up
    faster.
  3. Meet with a financial professional who can help you to plan and meet
    your long-term financial goals. You can benefit from their expertise
    and expand your financial IQ along the way.

Click here
to access the study.

About the Insured Retirement Institute: The Insured Retirement
Institute (IRI) is the leading association for the retirement income
industry. IRI proudly leads a national consumer coalition of more than
30 organizations, and is the only association that represents the entire
supply chain of insured retirement strategies. IRI members are the major
insurers, asset managers, broker-dealers/distributors, and 150,000
financial professionals. As a not-for-profit organization, IRI provides
an objective forum for communication and education, and advocates for
the sustainable retirement solutions Americans need to help achieve a
secure and dignified retirement. Learn more at http://www.irionline.org/.

About the Center for Generational Kinetics: The Center for
Generational Kinetics is the number one Millennials research and
strategy firm. The Center’s team of PhD researchers and on-site speakers
help companies and organizations solve tough generational challenges
with Millennials, iGen and emerging generational trends. Each year, the
Center works with over 125 clients around the world from car
manufacturers and hoteliers to insurance, healthcare and technology
professionals. The Center’s team is frequently quoted in the media about
the effect of generations on everything from education to retirement.
Learn more at http://GenHQ.com/.

Contacts

Insured Retirement Institute
Andrew Simonelli, 202-469-3009
asimonelli@irionline.org