In my last article, I wrote about Age, Gender and Retirement Perspectives. The opinion of retirees and older workers alike is that millennials may have a better chance to control their future when it comes to saving money for their future lifestyles. Let's take a closer look at that and consider the millennial perspective.
The Future of Retirement: Generations and Journeys research (2016) identified a number of approaches that people take when it comes to money and life which in turn affect their behaviours and attitudes to retirement planning. One approach was labelled; “assured optimists”. They represent about 16% of people surveyed and tend to be more optimistic about the future. They are more likely to have the luxury of being able to take risks while having fun and enjoying life. Millennial men may fit well into that category. They’re young, energetic and have time to accumulate money and recover from markets that have their inevitable downturns. They may enjoy spending money on vacations, toys and going out on the town. A natural focus is having a successful career.
I rate fun and enjoyment as important |
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Ages 25 - 29 |
42% |
Ages 70+ |
31% |
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Reproduced with permission from The Future of Retirement Generations and Journeys, published in 2016 by HSBC Holdings plc. |
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On the flip side, they are more likely to stop or face difficulties in saving and regret not seeking financial advice. Their battle, like so many working people, is satisfying the need for cash and gratification now while recognizing the need for cash to support lifestyles down the road. Current income and cash flow may matter more than the level of current investable assets. That in turn takes the focus away from the importance of future income supported by continual deposits into retirement savings plans. So Millennial men in particular, may at times be pulled in opposite directions.
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58% |
of Millennials have high expectations of retirement compared to 39% of |
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71% |
of Millennial men say saving for retirement is a top priority |
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62% |
of Millennial men are very involved in monitoring or managing their retirement |
| Published with written permissions from the LIMRA Secure Retirement Institute, entitled; “If the Shoe Fits: Generational Names and Retirement Attitudes, 2017” | |
The same research found that while 6/10 consumers rank saving for retirement a top priority, there are gender differences.
Making retirement savings is a priority |
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| 2/3 of men agree | |
| 51% of women agree | |
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Published with written permissions from the LIMRA Secure Retirement Institute, entitled; “If the Shoe Fits: Generational Names and Retirement Attitudes, 2017” |
Women would benefit from investing time in discussions and activities that encourage them to make saving for retirement a priority. They could also benefit from getting involved in retirement planning exercises that boost their confidence when making financial decisions. The good news is that women are more likely to stick to a plan and focus on the end goal once they get started. Not only do Millennial men have the highest expectations of retirement, they are confident in achieving them. They tend to be the most engaged with prioritizing retirement savings. They are also the most engaged in monitoring and managing those retirement investments. Does that sound like you? Millennial men may need better tools to gauge their actual level of retirement preparedness and avoid overconfidence, which can, in turn, undermine retirement security.
Research consistently points out that people of all ages benefit from seeking professional advice when planning and saving for retirement. Ensure that professional advice comes from accredited advisors who subscribe to a Code of Ethics that can help to raise the bar when it comes to client/advisor relationships and turning those relationships into win-win scenarios on a long-term basis. After all, saving for retirement is a long-term proposition.
© 2019 by Peter Wouters. Republished with permission by Peter Wouters. For the complete list of articles, please visit here.
This blog reflects the views of the author as of the date stated. This information should not be considered a recommendation to buy or sell nor should it be relied upon as investment, tax or legal advice. Empire Life and its affiliates does not warrant or make any representations regarding the use or the results of the information contained herein in terms of its correctness, accuracy, timeliness, reliability, or otherwise, and does not accept any responsibility for any loss or damage that results from its use.
July 2019