38 INVESTMENT ADVISOR DECEMBER 2017 | ThinkAdvisor.com
knowing how much they’ve spent makes
it difficult to plan and can have ripple
effects throughout their lives,” states
the report, which was based on a nationwide sample of more than 2,200 respondents, including 2,010 caregivers.
WHAT MILLENNIALS WANT
In a new survey, millennial workers
indicated that they are more confident
making investment decisions on their
own vs. members of older generations
and also are very receptive to professional financial help, reports Schwab
Retirement Plan Services.
Despite the financial
demands they face, millennials are taking positive steps
with regard to their saving and
investing habits, especially
with their 401(k)s, the survey found, and 80% said they
would like personalized 401(k) advice.
Schwab notes that workers in the
25-to- 36 age group are especially reliant
on 401(k)s for the money they will need
in retirement, with 78% reporting that a
401(k) is their largest or only source of
The Schwab survey reveals that millennials are disproportionately affected
by money-related stress. Thirty-five percent say it has affected their job performance, compared with 18% of Gen Xers
and 11% of baby boomers.
Twenty-four percent of millennials
cite student loan debt as a source of
financial stress. At the same time, 80%
of millennials state they are caught up
on bills and have some money left over
at the end of the month.
“It’s heartening to see that saving for
retirement has become a priority for so
many workers, especially the youngest
generation of workers, for whom retire-
ment can seem like a lifetime away,”
Steve Anderson, president of Schwab
Retirement Plan Services, said in a state-
ment. “Our findings show that, inspite
of — or perhaps because of — the finan-
cial challenges they faced as they entered
the workforce, millennials know how
critical it is to keep on top of their financ-
es today with an eye toward tomorrow.”
Koski Research conducted the online
survey of 500 U.S. workers who were
saving in a workplace 401(k) plan; they
were not asked at which institution they
have their accounts. Respondents work
for companies with at least 25 employ-
ees and ranged in age from 25 to 70.
Twenty-five percent of millennial
respondents say they invest the money
they have left over each month in the
stock market; in addition, 34% of mil-
lennials put extra money toward their
401(k), compared with 20% percent
of Gen Xers and just 8% of boomers.
Recent research by the Investment
Company Institute finds that mutual
funds are the most popular investment
for U.S. households to meet retirement
and other financials goals.
Millennials in the Schwab survey are
savvier than older generations about
the fees they paid for their retirement
investments. Fifty-one percent say fees
influence their choice of 401(k) investments “a lot,” compared with 40% of
Gen Xers and 38% of boomers.
They are also more confident making
investment decisions on their own, with
64% of millennials saying they are very
or extremely confident making investment decisions solo, compared with
47% of Gen Xers and 39% of boomers.
Add a financial professional to the
mix, and all respondents’ confidence
rises. Eighty-five percent of millennials,
73% of Gen Xers and 72% of boomers
feel the same level of high confidence
with the aid of a professional.
LESSONS FROM A BUS TOUR
Investopedia and American Century
Investments want to spread the word
about financial planning while also learning about the financial fitness of the typical
American consumer, so top executives from
each firm (plus licensed reps of American
Century) embarked on a bus tour across
much of the Midwest in October.
The Financial Coach, a 45-foot-long
tour bus, stopped in six cities in five
states, targeting local events attracting
big crowds, such as the Chicago marathon, Indiana University Homecoming
and Financial Planning
Association annual meeting, in
What its riders found after
talking with thousands of peo-
ple, including more than 2,200
who took a three-question
financial quiz, is how little peo-
ple know about financial markets, invest-
ing and saving for retirement even though
those polled across a variety of generations
say retirement planning is their number
one financial issue. Over 50%, for example,
don’t know the definition of a bull market
or that they should save for an emergency
fund. Those under 40 are also concerned
about paying off their student loans.
Despite the focus on retirement,
many people have no idea about how to
calculate how much they need to save
for retirement or the size of the com-
pany match for their 401(k) plans. More
specifically they don’t know if they’re
saving enough to take full advantage of
their company’s match.
But those same people who waited in line to speak with reps on the
tour bus about their financial situation
won’t necessarily seek out the counsel
of financial advisors, according to Jay
Hummel, American Century’s senior
vice president of direct sales and service,
who was on the recent bus tour.
Michael S. Fischer, Bernice Napach and
Emily Zulz write for ThinkAdvisor.com.
Schwab notes that workers in the
25-to- 36 age group are especially
reliant on 401(k)s for the money
they will need in retirement.