Millennials get it—younger workers, both male and female, say they are relying on themselves for the money they’ll need in retirement (89 percent of both groups). The 401k, they add, is the largest or only source of retirement savings for most, according to a new survey from Schwab.
However, they need (and want) help. Sixty-one percent of Millennial women and 44 percent of Millennial men feel they don’t know what their best 401k investment options are.
Likewise, an overwhelming majority of female and male Millennials wish they had an easier way to know how to choose their 401k investments.
Saving for retirement is causing this generation plenty of stress as well. For example:
- Only one-third Millennial women feel totally on top of their 401k investments, and 42 percent feel a lot of stress about choosing the right 401k investments.
- For Millennial men, half feel totally on top of their 401k investments, and more than one-third feel 401k investing-related stress.
“Recognizing the importance of this vehicle to their financial future, most Millennials say they want help from a professional in managing their 401(k) investments,” according to Schwab. “Millennial women are even more favorable to personalized 401(k) advice than their male counterparts, 79 percent compared to 67 percent.”
More Millennial women than men would also like help with specific aspects of retirement planning, like managing current expenses to save more money for retirement and calculating just how much money they’ll need to save for retirement.
“Professional 401k advice can also go a long way towards boosting Millennials’ retirement saving confidence, especially for young women,” Schwab notes:
- Only a quarter of Millennial women feel very or extremely confident in their 401k investment decisions when working on their own, compared with over half of Millennial men.
- With the help of a financial professional, the gap essentially disappears: 76 percent of men and 75 percent of women would feel very or extremely confident with the aid of investment advice.
The survey also showed that Millennials would welcome employer-provided education, tools and resources to help with their overall financial health. The vast majority—87 percent of male and 92 percent of female Millennials—say they are interested in using a financial wellness program at work.
“Our experience has shown that taking advantage of professional advice can help 401k participants save more, be more diversified and stay the course during times of market volatility,” said Catherine Golladay, senior vice president of participant services and administration at Schwab Retirement Plan Services. “Millennials have the benefit of time on their side, so the earlier they consult with a professional and formulate a savings plan, the better they can prepare for retirement.”
Being healthy or having enough money?
When asked which concerns them more—being healthy enough to enjoy retirement or having enough money to enjoy retirement—54 percent of Millennial men and just 30 percent of Millennial women surveyed say being healthy is the greater concern. Forty-six percent of men and 70 percent of women, the overwhelming majority, say having enough money is the greater concern.
This is true even though male and female Millennials say they are in good shape, physically and financially, in virtually equal numbers. Eighty-six percent of Millennial men and 84 percent of Millennial women report being in good personal health, and 77 percent of Millennial men and 79 percent of Millennial women report being in good financial health.
Female Millennials’ concerns about having enough money in retirement are borne out in their anticipated age of retirement. Roughly a third (31%) of Millennial women think they will still be working at age 70, compared to 22 percent of Millennial men who feel the same way, suggesting these women are concerned they will need a few extra years of income to ensure a comfortable retirement.
“A variety of social and economic factors impact the way men and women view money, and our survey showed that this is already affecting the youngest generation of workers,” said Catherine Golladay, senior vice president of participant services and administration at Schwab Retirement Plan Services. “It is important for women and men alike to have access to and take advantage of critical resources, such as professional 401(k) advice and financial wellness programs, to help close the gap in retirement savings confidence.”