The Millennial generation is growing up, at least in terms of wanting to save more for a secure retirement, according to a recent survey by Willis Towers Watson.
The 2015/2016 Global Benefits Attitudes Survey, conducted between June and August 2015, measures the attitudes of over 30,000 private sector employees in 19 countries, over five thousand of whom live in the United States.
This year, the study reveals that 59% Millennials (defined in this survey as respondents between the ages of 18 to 34) are willing to pay a higher amount for a guaranteed retirement benefit, up from 42% in 2009. 66% of boomers would also be willing to sacrifice pay for more secure retirement benefits, versus only 50% in 2009. However, only 32% of Millennials and 34% of boomers are willing to pay a higher amount for lower or more predictable health costs, down from 43% and 45%, respectively, in 2009*.
So why the shift?
- Lingering Economic Uncertainty
The survey revealed that employees’ financial situations are improving, but this recent improvement has done little to resolve long-term financial worries. Respondents who have felt financially vulnerable for months or years recognize the value of financial security and they’re becoming more and more willing to forgo pay today to make it a reality tomorrow. Millennials in particular are frequently saddled with large amounts of debt and remember the lessons of the stock market decline of 2008 and the stress it caused their parents and relatives. Though they may have struggles in the present, they want to avoid falling into a similar trap in the decades down the road.
- The “Side-Hustle” Economy
Freelance, gig, or contractor jobs have taken up a prominent place in the public consciousness, especially among young people who tend to change jobs rapidly and have second or third jobs during certain periods. These jobs, which can of course be important for filling in financial gaps and boosting income levels, generally don’t come with good—if any—health or retirement benefits. This can end up delaying retirement savings, as young workers struggle to make ends meet and lack the guidance and ‘push’ provided by a traditional employer-sponsored retirement plan. However, with each passing year the lack of retirement progress weighs heavier and heavier on the generation prompting action.
- Little Faith in the Safety Net
For years the news reports regarding the state of Social Security in the US have been uniformly dire. This representation has had an impact. A 2014 Pew Research Center Survey found that only 6 percent of Millennials expect current benefits to be present when they hit 67 and would be eligible for full benefits. More than half of those surveyed by Pew think Social Security won’t exist AT ALL when it’s their turn to collect*. Therefore, their retirement—whatever it looks like—is up to them to achieve without government support.
For agents with the right financial products, this state of affairs presents a singular opportunity. Indexed Universal Life Insurance (IUL) in particular can be positioned in such a way as to provide the secure retirement growth young adults crave, along with disability care and a significant death benefit to protect and provide for the families more and more Millennials are now planning for. Agents should work to convey this value to their clients along with how it can help them achieve lasting long term financial security and independence.
Imeriti Financial Network (“IFN”) is a Field Marketing Organization business that recruits and/or recommends insurance agents to insurance carriers. IFN does not engage in the solicitation or sale of insurance products to end clients. The information contained within this blog is for general information purposes only and should not be construed as provide tax or legal advice or a recommendation or inducement to purchase an insurance product.
Any information, statistics, and opinions reported within this blog were obtained from sources believed to be reliable. However, IFN and/or the blog author do not guarantee or claim responsibility for the truth, accuracy, and reliability of any source, fact and/or statistic cited and may not necessarily agree with any opinions expressed by such sources.