PLANSPONSOR - December/January 2020 - 34

FEATURE | ON THEIR OWN TERMS
their portfolios and their homes. While wages have begun to
increase in recent years, they were stagnant for much for the
previous decade, according to Pew.
" They're the only generation who saw two extremely
violent financial downturns and swings during that particular
formative age, " says Kevin Boyles, vice president and business
development director with Millennium Trust Co. LLC in Oak
Brook, Illinois. " The rest of us have seen them, but not at the
age when it really impacts you and how you look at institutions.
They came out of that very distrustful. "
Nearly two-thirds of Millennials say that living through
the market upheaval has made them a more conservative
investor, according to The Bank of the West.
Demands on their dollars. Millennials' paychecks are
spread thinner than those of previous generations at their age.
These Americans are dealing with larger student loan balances
and higher costs for housing and child care. Like all workers,
they also shoulder a greater responsibility for their own-
rising-health care costs, as employers continue to transition
to cost-sharing plans.
" Millennials are looking at what they're paying for health
insurance, what they're paying for student loans and credit
cards, for their children's education, " says Tim Rouse, executive
director of the SPARK [Society of Professional Asset Managers
and Recordkeepers] Institute in Simsbury, Connecticut.
" They're just looking at their paycheck and trying to figure out
where the next best dollar goes. "
Demographic differences. Millennials are the most diverse
generation yet to pass through the workforce, and members are
already experiencing the wealth and retirement savings gap
between white and non-white workers, even after adjusting for
factors such as education or parental income. If unaddressed,
that gap will leave a greater share of this generation unprepared
for retirement, according to William Gale, a senior fellow
in the economic studies program at the Brookings Institution
in Washington, D.C.
" Even if everything for white Millennials turned out the
same as for white Boomers, and for all black Millennials
turned out the same as for black Boomers, Millennials as a
generation would be doing worse than the Boomers, because
the composition would be so different, " Gale says.
HOW PLANS CAN HELP BOOST SAVING
Even in the face of such headwinds, Millennials are aware
that they are responsible to fund the majority of their own
retirement. While according to Pew Research Center, many
Millennials have no access to a workplace retirement plan,
those who have one are more apt to contribute to it than
previous generations were at their age, says the Transamerica
Center for Retirement Studies.
Still, an AON research reports notes, this group often fails
to contribute enough money to build the (Continued on page 36)
34 PLANSPONSOR.COM December 2019 - January 2020
MILLENNIALS AND
RETIREMENT SAVINGS:
IT'S COMPLICATED
If you go by memes alone, Millennials
are squandering their disposable income
on avocado toast. In reality, the demands
on Millennial finances go far deeper.
THE MILLENNIAL PATH TOWARD
FINANCIAL WELLNESS HAS
COMPETING ELEMENTS.
Millennials are the most educated generation
in history ...
Percentage of Those Ages 21 to 36 Who Have Completed
At Least a Bachelor's Degree, by Gender
n Silent (1965) n Boomer (1985) n Gen X (2001) n Millennial (2017)
36%
29%
22% 24%
15%
9%
Men
Source: Pew Research Center
... and they're planning to mostly self-fund
retirement ...
Generations' Expected Primary Source of Retirement Income
l Self-funded savings* l Social Security l Working l Other
11%
8%
39%
42%
Boomers
Source: Transamerica
14%
49%
28%
Gen X
19%
Millennials
*401(k)s, 403(b)s, IRAs and other savings
9%
17%
53%
11%
Women
20%
28%
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