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Generational Retirement Trends Study - 2015

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T. Rowe Price's recent Retirement Saving & Spending Study revealed that across groups of 401(k) savers, millennials are following better financial habits than those of baby boomers.

“We think it’s encouraging that millennials are so receptive to saving for retirement and that they are generally practicing good financial habits,” says Anne Coveney, senior manager of Retirement Thought Leadership at T. Rowe Price who led this research study. “When they have the means to do the right thing, it appears that they often do.’

Throughout this presentation, we uncover how different generational workers are saving and spending, and indentify the statistics that differentiate these populations.

Published in: Economy & Finance

Generational Retirement Trends Study - 2015

  1. Millennial, Gen X, and Baby Boomer Workers and Retirees RETIREMENT SAVING & SPENDING STUDY
  2. 22 Table of Contents  Methodology  Workers with 401(k)s: Millennials, Gen X, and Baby boomers – Workers’ 401(k) Accounts – Auto-features and Target Date Funds – Saving, Spending and Advice – Profiles  Millennials who are eligible to participate in their employers’ 401(k) but do not (eligible but not contributing or non-savers)  Retirees who saved in 401(k)s Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved
  3. 33 Methodology  3,026 working adults 18+ currently contributing to a 401(k) plan or eligible to contribute and having a balance of $1,000+  1,027 adults retired in the last one to five years with a Rollover IRA or left-in-plan 401(k) balance – Active participants and retirees conducted online February 19 through March 3, 2015  255 Millennials (18–33 years old) working and eligible for a 401(k) plan at current employer but not contributing and do not have a balance in that 401(k)—eligible nonparticipants (ENPs) – Conducted online March 4 through March 25, 2015 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Representative national surveys of:
  4. WORKERS’ 401(k) ACCOUNTS
  5. 55 Market Value of 401(k) Plan Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers Thinking about your 401(k) plan, what would you say is the current market value of that account? Workers By Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) $1 to < $1,000 5 5 3 8 $1,000 to < $5,000 12 5 9 22 $5,000 to < $15,000 13 11 10 19 $15,000 to < $25,000 9 6 8 11 $25,000 to < $50,000 12 11 12 12 $50,000 to < $100,000 16 12 20 13 $100,000 to < $250,000 20 25 22 11 $250,000 to < $500,000 9 14 11 1 $500,000 or more 6 12 5 3 Average $ in thousands $134 $201 $138 $59 Median $ in thousands $51 $103 $67 $16 By Worker Generation Q.7
  6. 66 Base: Millennial workers Market Value of 401(k) Plan Total Millennial Workers by Gender Thinking about your 401(k) plan, what would you say is the current market value of that account? Q.7 Millennial Workers Total Workers (%) Male (%) Female (%) $1 to < $1,000 8 6 11 $1,000 to < $5,000 22 19 27 $5,000 to < $15,000 19 18 21 $15,000 to < $25,000 11 11 11 $25,000 to < $50,000 12 13 11 $50,000 to < $100,000 13 16 9 $100,000 to < $250,000 11 14 7 $250,000 to < $500,000 1 1 1 $500,000 or more 3 4 1 Average $ in thousands $59 $74 $38 Median $ in thousands $16 $22 $11 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved
  7. 77 Personal Deferral Rate Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, expecting to contribute to their 401(k) (96%) About what percentage of your personal income does this contribution represent? Workers by Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) 1–2% 11 13 10 12 3–4% 16 13 15 19 5–6% 22 20 23 23 7–9% 13 10 15 11 10–14% 22 25 22 20 15–19% 8 10 6 8 20%+ 8 10 9 7 Average % 8 9 8 8 Median % 7 8 7 6 By Worker Generation Q.41
  8. 88 401(k) Contribution Compared With Past 12 Months 11% 10% 6% 9% 49% 60% 73% 61% 40% 30% 21% 30% Millennial Gen X Baby Boomer Total Workers Lower Same Higher Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, at employer one year or longer (93%) As a percentage of your income, how does that compare with the past 12 months? By Worker Generation Q.40
  9. 99 By Worker Generation Recommended Contribution Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers As far as you know, what percentage of your income do financial experts typically recommend someone your age save to make sure you have a comfortable retirement? Workers by Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) 1–2% 3 1 2 5 3–4% 6 5 5 9 5–6% 13 7 12 20 7–9% 6 2 8 8 10–14% 26 20 31 24 15–19% 11 14 11 8 20–25% 9 13 8 8 Not sure 27 39 24 19 Average % 11 13 11 9 Median % 10 10 10 9 Q.42
  10. 1010 By Worker Generation Increasing Your 401(k) Contribution 51% 50% 49% 41% 31% 26% 40% 44% 36% 28% 19% 11% 52% 50% 53% 44% 34% 29% 61% 54% 56% 48% 40% 39% You got a raise You had to increase your contribution rate to get the maximum matching contribution from your employer You paid down debt you owe You reduced your overall spending You had an emergency fund for unexpected expenses You learned that others of your age and income were saving a bigger proportion of their income than you are Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, “absolutely certain or very likely" How likely would you be to increase the proportion of your income you contribute to your 401(k) if... Q.43
  11. 1111 By Workers Reasons for Contributing Below the Maximum 81% 71% 66% 43% 48% 53% 18% 14% 18% 20% 41% 34% 27% 34% 6% 11% 14% 16% 18% 21% 48% You don't need to save for retirement You are paying back college loans You are saving for a child's education You don't want to lock up in a 401(k) money you might need soon You are saving for retirement through other vehicles You are paying back debt other than college loans You're contributing all you can afford Not a Reason Minor Major Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, contributing below the maximum allowed to 401(k) (89%) As you probably know, you are contributing less to your 401(k) than the IRS permits you to defer from income. Please indicate below the extent to which any of the items below are a reason for this. Q.44
  12. 1212 By Worker Generation Major Reasons for Contributing Below the Maximum 48% 21% 18% 16% 14% 11% 6% 46% 13% 22% 8% 4% 3% 4% 52% 23% 16% 15% 17% 10% 5% 45% 27% 15% 24% 19% 23% 9% You're contributing all you can afford You are paying back debt other than college loans You are saving for retirement through other vehicles You don't want to lock up in a 401(k) money you might need soon You are saving for a child's education You are paying back college loans You don't need to save for retirement Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, contributing below the maximum allowed to 401(k) (89%) As you probably know, you are contributing less to your 401(k) than the IRS permits you to defer from income. Please indicate below the extent to which any of the items below are a reason for this. Q.44
  13. 1313 By Worker Generation Influence of Match on Contribution 10% 11% 25% 15% 31% 23% 11% 22% 59% 66% 64% 63% Millennial Gen X Baby Boomer Total Workers On factors other than the match terms To take partial advantage of this match To take full advantage of this match Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, expecting an employer match (86%) To what extent is your contribution rate determined by this match? You set your contribution rate... Q.46
  14. 1414 By Worker Generation Retirement Expectations 51% 49% 49% 36% 29% 26% 24% 57% 57% 49% 31% 29% 27% 13% 49% 49% 44% 35% 24% 28% 24% 48% 42% 56% 43% 36% 22% 36% You will work at least part time in retirement You will have to reduce your standard of living You will have enough money to pay for health care You will live as well or better as you did when you were working You will be able to leave money to family members or charities You will run out of money You will be able to help out younger family members with tuition or housing expenses Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers Given the retirement savings you have in place right now and the rate at which you are adding to those savings, which of the statements below do you expect will be true for you in retirement? Q.53
  15. 1515 Base: Workers Social Security By Worker Generation To what extent do you agree or disagree with each of the following statements about Social Security? "I expect Social Security to go bankrupt before I retire." Workers By Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) Net: Agree 47 28 51 60 Strongly agree 15 6 17 21 Agree 32 22 34 39 Disagree 31 35 31 25 Strongly Disagree 23 37 18 15 Net: Disagree 53 72 49 40 Q.38 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved
  16. AUTO-FEATURES AND TARGET DATE FUNDS
  17. 1717 By Worker Generation True of Target Date Funds 81% 80% 80% 73% 72% 86% 81% 84% 59% 63% 85% 81% 80% 78% 75% 73% 79% 78% 74% 74% Target date funds are managed by professionals meaning you will potentially get better results than you would on your own These funds hold a mix of asset classes which changes over time so you don't have to make changes to your investments as you get closer to retirement It's better to hold additional funds in your 401(k) than just a target date fund The fees and expenses on target date funds in 401(k)s are about the same as what you would pay for similar funds outside of your 401(k) account These funds are designed as a suitable investment to get you not just to retirement, but through retirement as well Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Own target date funds (38%), excluding not applicable As far as you know, which of the following statements are true and which are not true of the target date funds you hold? Q.83
  18. 1818 By Worker Generation True of Target Date Funds (cont.) 71% 66% 62% 50% 56% 56% 57% 36% 77% 69% 60% 47% 72% 68% 67% 59% Because target date funds are approved for your 401(k) by your employer, they are probably of high quality Target date funds are usually less risky than balanced funds These funds are designed as a suitable investment to get you to retirement, but not through retirement If you leave your job you can't take your target date fund with you, you have to sell it and reinvest with your new plan or on your own Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Own target date funds (38%), excluding not applicable As far as you know, which of the following statements are true and which are not true of the target date funds you hold? Q.83
  19. 1919 By Worker Generation Market Value and Allocation of Assets Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Mean values unless otherwise indicated Please indicate the current market value of these assets held by you or by other members of your household. Of this total, please indicate the percentage held in… Workers By Generation $ % Allocation Baby Boomer Gen X Millennial Baby Boomer Gen X Millennial Self $433 $339 $228 Other member of household 179 202 184 Total household (mean) $612 $540 $412 Total household (median) $291 $173 $67 Stock including employer stock or stock mutual funds excluding asset allocation funds 292 216 123 45 40 34 Bond or bond mutual funds excluding asset allocation funds 121 114 97 20 19 19 Asset allocation funds 83 102 90 13 19 20 Money market mutual funds or checking and savings accounts 117 109 103 23 22 28 Total household (mean) $612 $540 $412 100 100 100 Q.77-81
  20. 2020 By Workers and Retirees Satisfaction with Investments Overall 5% 3% 6% 5% 4% 16% 13% 13% 14% 10% 53% 56% 56% 55% 48% 26% 28% 25% 26% 38% Millennial Gen X Baby Boomer Total Workers Retirees Not satisfied at all Not very satisfied Somewhat satisfied Very satisfied Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved All things considered, how satisfied are you with: Q.84
  21. 2121 By Worker Generation Automatic Enrollment Summary Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved As far as you recall, did you make a positive decision to enroll in your current 401(k) plan or were you enrolled automatically with the choice to opt out? As far as you recall, at what contribution rate were you automatically enrolled? Workers By Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) Enrolled automatically 15 14 13 20 Rate at which automatically enrolled 1% 24 34 15 24 2% 19 15 25 16 3% 20 14 23 21 4% 14 11 14 16 5% 11 8 12 12 6% 6 8 8 3 7% 1 1 1 2 Over 7% 5 10 2 5 Average % 3 3 3 3 Median % 3 3 3 3 Q.47, 48 Base: Workers enrolled automatically (15%)
  22. 2222 By Worker Generation Opt Out Rate Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers enrolled automatically (15%) At what contribution rate do you think you would have opted out instead of enrolling? Workers By Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) 1% 0 0 0 0 2% 10 16 7 8 3% 10 9 9 11 4% 10 4 13 11 5% 12 16 11 10 6% 9 0 11 12 7% 8 5 6 13 8% 10 9 15 7 9% 2 0 2 2 10+% 31 41 27 27 Average % 7 7 7 6 Median % 7 8 6 6 Q.49
  23. 2323 Base: Total workers who were enrolled automatically with the choice to opt out Note choices in Q49 were limited to 1+ the value provided in Q.48 in increments of 1 up to 10% or more. Automatic Enrollment Rate by Rate Would Have Opted Out Millennial Workers By Rate Would Have Opted Out Instead of Enrolling At what contribution rate do you think you would have opted out instead of enrolling? Automatic Enrollment Rate (%) 2% 3% 4% 5% 6% 7% 8% 9% 10%+ Average Median N = 31 31 34 35 40 38 19 9 85 322 322 1% (24%) 32 21 23 13 2 2 0 0 8 4 3 2% (16%) 0 38 21 18 10 2 1 0 10 5 4 3% (21%) 0 0 9 14 22 12 5 1 38 7 7 4% (16%) 0 0 0 3 14 50 15 4 14 8 7 5% (12%) 0 0 0 0 27 12 10 9 42 8 9 6% (3%) 0 0 0 0 0 0 0 8 92 10 10 7% (2%) 0 0 0 0 0 0 0 9 91 10 10 Over 7% (5%) 0 0 0 0 0 0 44 0 56 9 10 Q.48 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved
  24. 2424 By Worker Generation Attitudes About Automatic Enrollment 78% 78% 69% 43% 29% 80% 80% 60% 34% 17% 77% 74% 71% 47% 31% 79% 80% 74% 47% 35% I am satisfied that my employer automatically enrolled me Employers who offer a match should set the automatic enrollment contribution rate high enough for participants to take full advantage of the match I am satisfied with the contribution rate at which my employer enrolled me I wish my employer had enrolled me at a higher contribution rate I wish my employer had enrolled me at a lower contribution rate Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers enrolled automatically (15%), “agree completely or somewhat" Please indicate the extent to which you agree or disagree with each of the statements below about automatic enrollment in 401(k) plans. Q.51
  25. 2525 By Worker Generation Automatic Escalation Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers Is your contribution rate set at its current level unless you change it, or does it go up automatically each year unless you stop it? 81% 85% 90% 85% 19% 15% 10% 15% Millennial Gen X Baby Boomer Total Workers Set at current level Goes up automatically each year Q.50
  26. SPENDING, SAVING, AND ADVICE
  27. 2727 By Workers Dealing With Money 55% 42% 28% 9% 12% 7% 5% 5% 3% 2% 27% 34% 28% 30% 29% 26% 22% 19% 15% 11% 14% 19% 32% 47% 44% 48% 49% 51% 49% 47% 5% 6% 11% 14% 15% 18% 25% 25% 34% 40% I avoid dealing with my financial situation because it is out of control I have trouble meeting my monthly expenses I would benefit from having someone help me with my spending and debt management I commit to purchasing only what is on my shopping list when I go to the store I shop by going to the store for pre-selected items that I have researched online I save by any means necessary I am more comfortable with saving and investing extra money than with spending it I save money by cutting my flexible expenses, including entertainment, eating out and travel I'm confident that my spending is well within the limits of what I can afford I'm pretty good at living within my means Not Accurately At All Not Very Accurately Somewhat Accurately Very Accurately Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Please indicate how accurately each of the following statements describes you when it comes to money. Q.12
  28. 2828 By Worker Generation Dealing With Money 87% 82% 75% 74% 66% 89% 82% 72% 73% 63% 86% 82% 75% 74% 68% 88% 82% 79% 74% 67% I'm pretty good at living within my means I'm confident that my spending is well within the limits of what I can afford I save money by cutting my flexible expenses, including entertainment, eating out and travel I am more comfortable with saving and investing extra money than with spending it I save by any means necessary Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Describes me “very or somewhat accurately" Q.12 Please indicate how accurately each of the following statements describes you when it comes to money.
  29. 2929 By Worker Generation Dealing With Money (cont.) 61% 59% 43% 25% 18% 58% 49% 24% 17% 8% 61% 60% 47% 27% 22% 63% 68% 58% 29% 25% I commit to purchasing only what is on my shopping list when I go to the store I shop by going to the store for pre-selected items that I have researched online I would benefit from having someone help me with my spending and debt management I have trouble meeting my monthly expenses I avoid dealing with my financial situation because it is out of control Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Describes me “very or somewhat accurately" Please indicate how accurately each of the following statements describes you when it comes to money. Q.12
  30. 3030 By Worker Generation Managing Spending 74% 73% 71% 62% 47% 32% 67% 61% 56% 64% 55% 41% 20% 57% 75% 76% 73% 64% 49% 35% 69% 84% 86% 75% 67% 51% 42% 75% This year, you plan to make managing your financial situation a higher priority This year, you plan to improve your budgeting process and better manage your spending to a budget You track expenses carefully You stick to a spending budget You have a formal spending budget but it does not use spreadsheets or online applications You have a formal spending budget which uses spreadsheets or online applications Net: Have a written spending budget Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved "True" When it comes to managing spending, which of the following statements are true or not true for you? Q.15
  31. 3131 By Worker Generation Credit Card Spending 32% 25% 19% 25% 68% 75% 81% 75% Millennial Gen X Baby Boomer Total Workers Manage differently About the same way Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved In the year ahead, do you expect to manage your credit card spending and debt about the same way you managed it in the past year, or do you expect do manage your credit cards and credit card debt differently? Q.13
  32. 3232 By Worker Generation Managing Credit Cards Differently 69% 66% 38% 32% 14% 10% 4% 74% 82% 21% 26% 16% 1% 2% 65% 63% 42% 37% 13% 9% 5% 70% 59% 44% 29% 13% 16% 4% Pay down existing credit card debt Decrease your use of credit cards Pay your credit cards in full each month Stop using credit cards for new purchases Refinance credit card debt at a lower interest rate Increase your use of credit cards Increase your credit card debt Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Expect to manage credit cards differently (25%) Please indicate below how you expect to manage your credit card spending and debt in the year ahead. Q.14
  33. 3333 By Worker Generation #1 Funding Financial Priority 27% 22% 21% 15% 26% 29% 11% 16% 27% 21% 23% 15% 28% 17% 27% 12% Paying down debt Contributing to your 401(k) at the level required to take full advantage of a matching contribution your employer may offer but less than the maximum contribution limit Contributing to your 401(k) but below the level required to take full advantage of a matching contribution your employer may offer Contributing to your 401(k) at the maximum contribution limit Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, ranked at least one item (98%) In terms of how your household is funding financial priorities this year, please rank which of the items below comes first, which comes second, which third and so on until the end of the list. If an item does not apply to you or isn’t a priority at all, enter a rank of zero.. Q.55
  34. 3434 By Worker Generation #1 Funding Financial Priority (cont.) 6% 4% 4% 2% 1% 7% 5% 3% 2% 1% 4% 3% 4% 1% 2% 7% 2% 3% 2% 1% Contributing to an emergency fund Contributing to a Roth IRA Contributing to a traditional IRA Contributing to a health savings account (HSA) to fund some qualified medical expenses on a pre-tax basis Contributing to a 529 college savings account or other educational savings vehicle Total Workers Baby Boomer Gen X Millennial Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved Base: Workers, ranked at least one item (98%) In terms of how your household is funding financial priorities this year, please rank which of the items below comes first, which comes second, which third and so on until the end of the list. If an item does not apply to you or isn’t a priority at all, enter a rank of zero.. Q.55
  35. 3535 By Worker Generation Sources of Funds for Emergency Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved If you suddenly faced an emergency that required more cash than you had on hand, to which of the following sources of funds would you turn? Workers By Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) Credit cards 52 43 53 57 A special emergency fund account you have established for such needs 37 36 37 39 Family members or friends 35 17 35 55 Your after-tax personal savings and investments 28 36 24 25 A special emergency fund you mentally earmark for such needs 21 20 21 22 Home equity loan 16 19 18 11 Other bank loan 13 11 13 15 Your balances in tax-deferred workplace retirement accounts 12 14 11 11 No emergency fund available 4 4 5 3 Q.19
  36. 3636 By Worker Generation Advised 62% 65% 64% 64% 5% 1% 2% 2% 6% 3% 3% 26% 31% 35% 31% Millennial Gen X Baby Boomer Total Workers Never had a paid financial advisor Ever have both a paid traditional advisor and a paid robo advisor Ever have a paid robo advisor only Ever have a paid traditional advisor only Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved. Do you currently have (In the past five years, have you had) a relationship with a professional financial advisor—that's someone you pay either through fees or commissions—to assist you in financial decisions, financial product selection, planning your retirement income or in selecting providers of financial services? To be clear, this could be either a traditional advisor or a so-called robo advisor (that’s to say an online, algorithm-driven, low-cost advice platform with limited personal interaction such as Betterment or WealthFront) or both? Q.27, 28
  37. 3737 By Worker Generation On Track to Meet Financial Goals 4% 7% 12% 7% 18% 25% 23% 22% 57% 53% 51% 53% 20% 16% 14% 17% Millennial Gen X Baby Boomer Total Workers Not comfortable at all Not very comfortable Somewhat comfortable Very comfortable All things considered, how comfortable are you that you are on track to meet your financial goals? Q.31 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  38. 3838 By Worker Generation Financial Well-Being Compared With Parents 8% 8% 9% 8% 20% 26% 26% 24% 48% 48% 46% 47% 24% 19% 20% 21% Millennial Gen X Baby Boomer Total Workers Much worse off financially Somewhat worse off financially Somewhat better off financially Much better off financially Compared with how your parents lived when they were the age you are now, would you say you are: Q.30 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  39. 3939 By Worker Generation Perceived Job Security 38% 33% 39% 36% 32% 38% 35% 35% 22% 21% 18% 21% 7% 8% 8% 8% Millennial Gen X Baby Boomer Total Workers Not concerned at all Not very concerned Somewhat concerned Very concerned Base: Workers How concerned are you that you may lose your job in the next 12 months: Q.32 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  40. PROFILES OF WORKERS WITH 401(k)S: MILLENNIALS, GEN X, AND BABY BOOMERS
  41. 4141 By Workers Age  Q. 2 How old are you? Workers by Generations Total Workers Baby Boomer Gen X Millennial Birth years 1946–1964 1965–1980 1981–1996 Age at time of study 50–68 34–49 18–33 % % % % Under 25 8 0 0 26 25–29 12 0 0 40 30–34 14 0 10 34 35–39 10 0 24 0 40–44 14 0 34 0 45–49 13 0 33 0 50–54 10 32 0 0 55–59 10 34 0 0 60–64 7 22 0 0 65–69 3 11 0 0 70+ 1 2 0 0 Average age 42 58 42 27 Q.2 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  42. 4242 Millennial Workers By 401(k) Participation Size of Organization Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved. Base: Millennial workers If you had to guess, about how many people work for your employer at all levels and in all locations across the United States? Total Millennial Workers Active in 401(k) (%) 99 or fewer 16 100 to 249 14 250 to 499 12 500 to 999 11 1,000 to 2,499 11 2,500 to 4,999 9 5,000 to 9,999 7 10,000 or more 20 Average # employees 3,398 Median # employees 830
  43. 4343 By Worker Generation Work Status 13% 5% 10% 9% 87% 95% 90% 91% Millennial Gen X Baby Boomer Total Workers Never retired, now working part-time Never retired, now working full-time Base: Workers Bearing in mind some people retire and go back to work, which one of the following phrases best describes your work situation? Q.1 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  44. 4444 By Worker Generation Level of Qualification for Position 1% 1% 2% 1% 73% 74% 78% 75% 26% 24% 20% 24% Millennial Gen X Baby Boomer Total Workers I am underqualified for this job My qualifications for this job are about right I am overqualified for this job Base: Workers How would you describe the fit between your skills, education, and experience and your current job? Q.58 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  45. 4545 Millennial Workers By 401(k) Participation Tenure at Current Employer Base: Millennial workers About how long have you worked for your current employer? Total Millennial Workers Active in 401(k) (%) Under 1 year 10 1 year 7 2 years 17 3–4 years 26 5–9 years 30 10–14 years 8 15+ years 3 Average # 5 Median # 4 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  46. 4646 By Worker Generation Pay Raise Base: Workers How much of a raise (as a percent), if any, did you get in the past 12 months? Workers By Generation Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) 0% 25 33 23 18 1% 9 10 8 9 2% 16 15 18 15 3% 18 22 18 15 4% 6 6 5 6 5% 11 6 12 16 6–9% 7 4 6 12 10+% 8 5 10 10 Average % (including none) 3 2 3 4 Median % (including none) 3 2 3 3 Average % (excluding none) 4 4 4 5 Median % (excluding none) 3 3 3 4 Q.35 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  47. 4747 Personal and Household Income and Total Debt Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) N = 3,026 514 1,007 1,505 Average personal income ($ in thousands) $82 $85 $90 $69 Median personal income ($ in thousands) $70 $72 $79 $57 Average household income ($ in thousands) $127 $119 $139 $117 Median household income ($ in thousands) $113 $108 $120 $100 Total debt (average $) $48 $29 $62 $48 None 22 32 19 16 Any to <$5,000 9 7 8 11 $5,000 to <$50,000 34 35 35 33 $50,000 to <$500,000 20 16 23 21 $500,000 or more 1 0 1 1 Total Workers by Generation Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  48. MILLENNIALS WHO ARE ELIGIBLE TO PARTICIPATE IN THEIR EMPLOYERS’ 401(k) BUT DO NOT (ELIGIBLE NOT CONTRIBUTING OR NON-SAVERS)
  49. 4949 Millennial Workers By 401(k) Participation Age Under 25 26% 25-29 40% 30-34 34% TOTAL MILLENNIAL WORKERS ACTIVE IN 401(k) Under 25 32% 25-29 38% 30-34 31% MILLENNIALS ELIGIBLE BUT NOT CONTRIBUTING TO 401(k) Q.B Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  50. 5050 Millennial Workers By 401(k) Participation Gender Male 59% Female 41% TOTAL MILLENNIAL WORKERS ACTIVE IN 401(k) Base: Millennial workers What is your gender? Male 32% Female 68% MILLENNIALS ELIGIBLE BUT NOT CONTRIBUTING TO 401(k) Q.A Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  51. 5151 Millennial Workers By 401(k) Participation Education High school or less 24% Some college 34% Four year college degree or more 42% TOTAL MILLENNIAL WORKERS ACTIVE IN 401(k) Base: Millennial workers What is your education level? High school or less 13% Some college 47% Four year college degree or more 41% MILLENNIALS ELIGIBLE BUT NOT CONTRIBUTING TO 401(k) Q.103/ (ENP Q.48) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  52. 5252 Millennial Workers By 401(k) Participation Marital Status Married or civil union 42% Divorced/ Separated/ Widowed 3% Never married 43% Living with partner 13% TOTAL MILLENNIAL WORKERS ACTIVE IN 401(k) Base: Millennial workers What is your marital status? Married or civil union 35% Divorced/ Separated/ Widowed 4% Never married 46% Living with partner 15% MILLENNIALS ELIGIBLE BUT NOT CONTRIBUTING TO 401(k) Q.102/ (ENP Q.47) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  53. 5353 Millennial Workers By 401(k) Participation Tenure at Current Employer Base: Millennial workers About how long have you worked for your current employer? Total Millennial Workers Active in 401(k) (%) Millennials Eligible but not contributing to 401(k) (%) Under 1 year 10 32 1 year 7 13 2 years 17 17 3–4 years 26 17 5–9 years 30 15 10–14 years 8 6 15+ years 3 0 Average # 5 3 Median # 4 2 Q.57/ (ENP Q.31) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  54. 5454 Millennial Workers By 401(k) Participation Pay Raise Base: Millennial workers How much of a raise (as a percent), if any, did you get in the past 12 months? Total Millennial Workers Active in 401(k) (%) Millennials Eligible but not contributing to 401(k) (%) 0% 18 42 1% 9 12 2% 15 11 3% 15 9 4% 6 4 5% 16 8 6–9% 12 6 10+% 10 8 Average % 4 2 Median % 3 1 Average % (excluding none) 5 4 Median % (excluding none) 4 3 Q.35/ (ENP Q.20) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  55. 5555 Millennial Workers By 401(k) Participation Student Loan Debt Base: Millennial workers How much debt does your household have when it comes to student loans? Total Millennial Workers Active in 401(k) (%) Millennials Eligible but not contributing to 401(k) (%) None 49 34 Less than $1,000 3 2 $1,000 to < $5,000 11 10 $5,000 to < $15,000 10 14 $15,000 to < $25,000 9 9 $25,000 to < $50,000 8 16 $50,000 to <$500,000 9 15 $500,000 or more 0 0 Average $ in thousands (excluding None) $31 $39 Median $ in thousands (excluding None) $16 $22 Q.93/ (ENP Q.39) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  56. 5656 Millennial Workers By 401(k) Participation Direction of Debt 8% 14% 26% 37% 28% 35% 26% 11% 12% 4% Millennials Eligible not Contributing to 401(k) (83%) Total Millennial Workers Active in 401(k) (80%) Much smaller Somewhat smaller About the same Somewhat larger Much larger Base: Millennial workers, have $1,000 or more in debt Thinking about this debt all together, that’s home equity loans, car loans, credit card debt, student loans and other consumer credit, how does that amount compare to a year ago? Q.94/ (ENP Q.40) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  57. 5757 Millennial Workers By 401(k) Participation Dealing With Money 41% 35% 30% 28% 22% 20% 18% 15% 8% 8% 23% 21% 16% 38% 15% 13% 19% 12% 13% 7% I'm pretty good at living within my means I'm confident that my spending is well within the limits of what I can afford I am more comfortable with saving and investing extra money than with spending it I save money by cutting my flexible expenses, including entertainment, eating out and travel I save by any means necessary I shop by going to the store for pre-selected items that I have researched online I would benefit from having someone help me with my spending and debt management I commit to purchasing only what is on my shopping list when I go to the store I have trouble meeting my monthly expenses I avoid dealing with my financial situation because it is out of control Total Millennial Workers Active in 401(k) Millennials Eligible but not Contributing to 401(k) Base: Millennial workers, describes me “very accurately" Please indicate how accurately each of the following statements describes you when it comes to money. Q.12/ (ENP Q.9) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  58. 5858 Millennial Workers By 401(k) Participation Major Reasons for Contributing Below the Maximum 45% 27% 24% 23% 19% 15% 9% 38% 42% 22% 35% 10% 8% 4% You're contributing all you can afford You are paying back debt other than college loans You don't want to lock up in a 401(k) money you might need soon You are paying back college loans You are saving for a child's education You are saving for retirement through other vehicles You don't need to save for retirement Total Millennial Workers Active in 401(k) (88%) Millennials Eligible but not contributing to 401(k) (98%) Base: Millennial workers, not contributing or expect to contribute below the maximum allowed to 401(k) As you probably know, you are contributing less to your 401(k) than the IRS permits you to defer from income. Please indicate below the extent to which any of the items below are a reason for this. Q.44/ (ENP Q.28) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  59. 5959 Millennial Workers By 401(k) Participation Financial Well-Being Compared With Parents 15% 8% 28% 20% 44% 48% 13% 24% Millennials Eligible but not Contributing to 401(k) Total Millennial Workers Active in 401(k) Much worse off financially Somewhat worse off financially Somewhat better off financially Much better off financially Base: Millennial workers Compared with how your parents lived when they were the age you are now, would you say you are: Q.30/ (ENP Q.16) Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  60. RETIREES WHO SAVED IN 401(k)S
  61. 6161 By Retirees Age 8% 2% 8% 25% 38% 13% 6% Under 50 50-54 55-59 60-64 65-69 70-74 75+ Average Age 63 How old are you? Q.38 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  62. 6262 By Retirees How Long Ago Retired 1 28% 2 20%3 20% 4 12% 5 19% Base: Retirees; average: 2.7 years, median 3.0 years About how long ago did you retire: Q.8 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  63. 6363 By Retirees Work Status Retired and not working or looking for work 68% Retired but now looking for work 9% Full-time as an employee 4% Part-time as an employee 10% Full-time as a contractor 2% Part-time as a contractor 6% Base: Retirees Bearing in mind that some people retire and then go back to work, which one of the following phrases best describes your work situation? Retired but now working (22%)… Q.1 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  64. 6464 By Retirees Relative Earnings A great deal more 7% Somewhat more 11% About the same 18% Somewhat less 24% A great deal less 40% Base: Retirees working full or part-time (22%) Hour-for-hour worked, how much money do you make today compared with what you made before you retired? Q.64 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  65. 6565 By Retirees Relative Hours Working much longer than you did 8% Working somewhat longer than you did 5% Working about as long as you did 9% Working somewhat less than you did 25% Working much less than you did 53% Base: Retirees working full or part-time (22%) In terms of hours, are you: Q.65 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  66. 6666 By Retirees Rejoined the Workforce Because... Mainly because you wanted to 69% Mainly because you had to 31% Base: Retirees working full or part-time (22%) When you rejoined the workforce after retiring did you do so: Q.66 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  67. 6767 By Retirees Looking for Work Because... Mainly because you want to 73% Mainly because you have to 27% Base: Retirees looking for work (9%) Are you looking for work: Q.67 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  68. 6868 Trend by Retirees Has a Withdrawal Plan 51% 48% 2015 2014 Base: Retirees Thinking about your investable assets—that’s your stocks, stock mutual funds, bonds, bond mutual funds, asset allocation funds including target date funds, money market mutual funds and other cash equivalents whether held in a 401(k), an Individual Retirement Account or outside the workplace savings system and any savings and checking accounts you may have—do you have a withdrawal plan under which you withdraw and use as income a certain portion of these assets each year? Q.70 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  69. 6969 By Retirees % Investable Assets Withdrawn 36% 11% 9% 7% 7% 10% 3% 9% 9% None 1% 2% 3% 4% 5% 6%-7% 8%-10% 11%+ Base: Retirees; average 5.5% (excluding none) About what percentage of your investable assets did you withdraw in the past 12 months? Q.71 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  70. 7070 By Retirees Organizing Retirement Income 67% 63% 63% 56% 49% 37% I don't plan to use my 401(k) or IRA balances until I am required to do so at age 70 1/2 I wouldn't use my 401(k) or IRA balances at all if I weren't required to I live mainly on Social Security or a pension so I only withdraw investable assets on an ad hoc basis I plan to live off the interest and dividends from my portfolio and not invade the principal until later in retirement I pace my withdrawals from my investable assets to match my expenses I take a specific percentage of my investable assets each year "Very or Somewhat closely" Base: Retirees Here are several ways of organizing income in retirement. For each, please indicate how closely it describes your situation. Q.72 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  71. 7171 By Workers and Retirees Sources of Retirement Income (Mean %) Base: Including none, items sum to 100% Approximately what percentage of your household income do you expect this source to provide in retirement? Approximately what percentage of your household income does this provide? Workers By Generation Retirees (%) Total Workers (%) Baby Boomer (%) Gen X (%) Millennial (%) Social Security 42 27 36 26 21 A traditional DB pension plan or cash balance plan 18 7 9 6 6 Earnings from employment including self-employment 10 6 5 5 7 Income from personal investment and savings accounts apart from IRAs and Roth IRAs 7 6 7 6 5 Income from IRAs or Roth IRAs 7 6 7 6 5 Other workplace retirement plans 6 1 1 1 1 401(k), Roth 401(k), 403(b), 457, profit sharing, money purchase or other type of TDDCRP provided through your workplace 4 40 30 42 47 Income from an inheritance 2 3 1 3 3 Annuities you purchased on your own outside work 2 2 2 2 2 Annuities you purchased through your workplace 1 1 0 1 1 Income from the sale of your primary residence 0 1 1 1 2 SEP or SIMPLE retirement plan 0 1 0 1 1 Insurance payouts 0 0 0 0 1 Q.37, 63 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  72. 7272 By Retirees Compared With When Working Living about as well as you did then 46% Living comfortably but less well than you did then 34% Living better than you did then 12% Struggling to make ends meet 8% Base: Retirees Compared with when you were working, would you say you are now: Q.61 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  73. 7373 By Retirees Proportion of Annual Income Replaced 1% 6% 11% 24% 30% 15% 15% None (0%) 1-20% 21-40% 41-60% 61-80% 81-99% 100% Base: Retirees; Average: 67% About what proportion of the annual income this household had before you retired does this household have today? Q.68 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  74. 7474 Trend by Retirees True of My Retirement 66% 54% 47% 32% 27% 24% 11% I have enough money to pay for health care I live as well or better as I did when I was working I will be able to leave money to family members or charities I will have to reduce my standard of living I will work at least part time in retirement I will be able to help out younger family members with tuition or housing expenses I will run out of money Base: Retirees Given your savings, income, and expenditures, which of the following statements are true of your retirement? Q.69 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  75. 7575 Trend by Retirees Financial Well-Being Compared With Parents 5% 5% 20% 20% 44% 44% 30% 31% 2014 2015 Much worse off financially Somewhat worse off financially Somewhat better off financially Much better off financially Note only asked of retirees in 2014 Base: Retirees Compared with how your parents lived when they were the age you are now, would you say you are: Q.30 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  76. 7676 Trend by Retirees On Track to Meet Financial Goals 6% 3% 16% 12% 51% 56% 27% 29% 2014 2015 Not comfortable at all Not very comfortable Somewhat comfortable Very comfortable All things considered, how comfortable are you that you are on track to meet your financial goals? Q.31 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.
  77. 7777 Trend by Retirees Satisfaction in Retirement 3% 2% 9% 10% 45% 46% 44% 42% 2014 2015 Not satisfied at all Not very satisfied Somewhat satisfied Very satisfied Base: Retirees All things considered, how satisfied would you say you are with your retirement so far: Q.60 Retirement Saving and Spending Study RSS2 © 2015 Brightwork Partners LLC. All rights reserved.

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