A recent survey from TIAA-CREF of 1,000 adults nationwide finds that when it comes to retirement planning, Gen Y (age 18-34) may be more conservative than older generations in their outlook, with only 56 percent saying they are counting on Social Security to provide income in their retirement, compared to 76 percent of 35- to 44- year-olds and 73 percent of 45- to 54-year-olds.
And with the memory of the financial crisis still strong for many younger adults, this group also is more concerned about market turbulence, the group noted. Thirty-four percent say if they could choose one primary goal for their retirement plan, it would be to ensure that their savings are safe, no matter what happens in the market – a marked increase from older generations. Only 16 percent of Americans age 35 to 44 and 22 percent of Americans age 45 to 54 report the same.
According to a release, the survey also found that Gen Y takes a pragmatic view about the length of time their retirement may last: 34 percent say they plan to accrue retirement savings to allow them to live comfortably for more than 25 years, compared to only 26 percent of respondents overall. However, 31 percent aren’t currently saving any money for retirement, due in part to financial challenges like student loans or jobs that don’t offer retirement plans. This late start could have a significant impact on their long-term savings.
“Many in Gen Y came of age during the Great Recession, which helped shape their attitudes and outlook on their own finances,” said Teresa Hassara, executive vice president and head of Institutional Business at TIAA-CREF. “They face higher student loan debt and fewer prospects for full-time employment with benefits than previous generations, making it harder to save enough for a comfortable retirement. The gap between the need for financial security and having the will and the means to achieve it may well impact this generation for decades to come.”
A secure and stable stream of retirement income could help those in Gen Y achieve their retirement goals, and 61 percent say they would be willing to devote a portion of their retirement savings to an investment that will provide a monthly payment for the duration of their retirement – the highest percentage of any age group surveyed. However, despite the strong desire for guaranteed monthly income, 72 percent of those in Gen Y are unfamiliar with annuities, and 62 percent say they don’t know if their retirement plan even offers an option for a monthly payment in retirement.
((Comments on this story may be sent to firstname.lastname@example.org))