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Millennials-BEFORE

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  1. 1. Millennial and Retiree Savings And Spending
  2. 2. 2 Methodology  Representative national survey of:  3,026 working adults 18+ currently contributing to a 401(k) plan or eligible to contribute and have balance of $1,000+  1,027 adults retired in the last 1 to 5 years and deriving income from a rollover IRA or left-in-plan 401(k)  In process: n=250 Millennial eligible non-participants in 401(k) plans  Conducted online February 19th through March 3rd, 2015
  3. 3. 3 Methodology: Worker Stratification and Weighting Actual N = Actual Proportion Weighted Proportion Baby Boomer 514 17% 30% Gen X 1,007 33% 41% Millennial 1,505 50% 29% Total Workers 3,026 100% 100%
  4. 4. 4 Agenda  Economic climate  Workers: focus on Millennials  Millennial eligible non-participants in 401(k) plans  Retirees  Descriptive information  Segment Profile Summaries
  5. 5. 55 By Workers I am overqualified for this job 24% My qualifications for this job are about right 75% I am underqualified for this job 1% How would you describe the fit between your skills, education and experience and your current job? Level of Qualification for Position Base: Workers Q. 58 NEW
  6. 6. 66 By Worker Generation How would you describe the fit between your skills, education and experience and your current job? Base: Workers Q. 58 Level of Qualification for Position 2% 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 NEW
  7. 7. 77 By Workers 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 Please indicate how accurately each of the following statements describes you when it comes to money. Dealing with Money Q. 12
  8. 8. 88 By Worker Generation Please indicate how accurately each of the following statements describes you when it comes to money. Q. 12 Dealing with Money 40% 34% 25% 25% 18% 42% 34% 22% 19% 14% 39% 32% 24% 25% 19% 41% 35% 28% 30% 22% 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 Describes me "Very accurately"
  9. 9. 99 15% 14% 11% 6% 5% 10% 12% 4% 3% 1% 16% 15% 12% 7% 5% 20% 15% 18% 8% 8% I shop by going to the store for pre-selected items that I have researched online I commit to purchasing only what is on my shopping list when I go to the store 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 By Worker Generation Please indicate how accurately each of the following statements describes you when it comes to money. Q. 12 Dealing with Money (cont’d) Describes me "Very accurately"
  10. 10. 1010 By Worker Generation 32% 25% 19% 25% 68% 75% 81% 75% Millennial Gen X Baby Boomer Total Workers Manage differently About the same way 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? Credit Card Spending Q.13
  11. 11. 1111 By Worker Generation Please indicate below how you expect to manage your credit card spending and debt in the year ahead. Q. 14 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 Base: Expect to manage credit cards differently (25%)
  12. 12. 1212 By Worker Generation When it comes to managing spending, which of the following statements are true or not true for you? Q. 15 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 "True"
  13. 13. 1313 By Workers and Retirees To what extent do you consider this expense essential, in the sense that you have to incur it, versus non- essential, in the sense that you can choose to incur it or not? Q. 18 Essential Expenses 96% 96% 95% 93% 93% 93% 82% 78% 77% 91% 96% 94% 89% 84% 76% 79% 80% 79% Health care Housing expenses Food you eat at home Federal, state and local income taxes Interest on and repayment of student loans Child care or day care expenses Interest on and repayment of debt apart from student loans Tuition or other current educational expenses not including student loans Transportation excluding leisure travel Retirees Total Workers Base: For those with this expense NEW
  14. 14. 1414 By Workers and Retirees To what extent do you consider this expense essential, in the sense that you have to incur it, versus non- essential, in the sense that you can choose to incur it or not? Q. 18 Essential Expenses (cont’d) 73% 72% 70% 51% 50% 43% 27% 25% 8% 74% 73% 73% 55% 54% 40% 32% 31% 5% Internet access at home Clothing, grooming and personal appearance Voice and data contracts for mobile devices Gifts to churches or other charities Loans to family members or friends Cable TV at home Leisure travel Entertainment, hobbies and recreation apart from leisure travel Other Retirees Total Workers Base: For those with this expense NEW
  15. 15. 1515 By Worker Generation 96% 94% 91% 89% 84% 80% 99% 96% 96% 91% 81% 82% 96% 94% 91% 87% 84% 84% 94% 93% 88% 88% 85% 74% Housing expenses Food you eat at home Health care Federal, state and local income taxes Interest on and repayment of student loans Tuition or other current educational expenses not including student loans Total Workers Baby Boomer Gen X Millennial To what extent do you consider this expense essential, in the sense that you have to incur it, versus non- essential, in the sense that you can choose to incur it or not? Essential Expenses Base: For those with this expense Q. 18 NEW
  16. 16. 1616 By Worker Generation To what extent do you consider this expense essential, in the sense that you have to incur it, versus non- essential, in the sense that you can choose to incur it or not? Q. 18 Essential Expenses (cont’d) 79% 79% 76% 74% 73% 73% 88% 83% 61% 77% 70% 74% 77% 76% 74% 73% 74% 72% 73% 81% 81% 74% 75% 72% Transportation excluding leisure travel Interest on and repayment of debt apart from student loans Child care or day care expenses Internet access at home Voice and data contracts for mobile devices Clothing, grooming and personal appearance Total Workers Baby Boomer Gen X Millennial Base: For those with this expense NEW
  17. 17. 1717 By Worker Generation To what extent do you consider this expense essential, in the sense that you have to incur it, versus non- essential, in the sense that you can choose to incur it or not? Q. 18 Essential Expenses (cont’d) 55% 54% 40% 32% 31% 5% 51% 66% 37% 31% 27% 3% 60% 55% 43% 33% 31% 6% 53% 46% 38% 33% 33% 4% Gifts to churches or other charities Loans to family members or friends Cable TV at home Leisure travel Entertainment, hobbies and recreation apart from leisure travel Other Total Workers Baby Boomer Gen X Millennial Base: For those with this expense NEW
  18. 18. 1818 By Worker Generation 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? Q. 19 Sources of Funds for Emergency 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
  19. 19. 1919 By Millennial Workers 65% 87% 77% 11% 5% 8% 24% 8% 15% Not Married/Partnered Married/Partnered Total Millennial Workers No, I do not live with a parent or in-law Yes, in my home Yes, in their home Do you live with a parent or in-law? Living with Parents and Marital Status Base: Has a living parent Q. 22 NEW
  20. 20. 2020 By Worker Generation 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 Advised 62% 65% 64% 64% 5% 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
  21. 21. 2121 By Worker Generation Compared to how your parents lived when they were the age you are now, would you say you are: Q. 30 Financial Well Being Compared to 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
  22. 22. 2222 By Workers Generations All things considered, how comfortable are you that you are on track to meet your financial goals? Q. 31 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
  23. 23. 2323 By Workers How much of a raise (as a percent), if any, did you get in the past 12 months? Base: Workers, Average (including none) 3% Q. 35 Pay Raise 25% 9% 16% 18% 6% 11% 2% 2% 2% 1% 8% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10+%
  24. 24. 2424 By Worker Generation How much of a raise (as a percent), if any, did you get in the past 12 months? Pay Raise Base: Workers Q. 35 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 % 3 2 3 4 Median % 3 2 3 3 Average % (Excluding none) 4 4 4 5 Median % (Excluding none) 3 3 3 4 Added Avg/median ex none
  25. 25. 2525 By Workers 23% 21% 12% 31% 31% 22% 32% 33% 45% 15% 15% 21% I expect Social Security to go bankrupt before I retire I’m expecting the equivalent of what Social Security pays today when I retire I’m expecting some Social Security benefits when I retire but nothing as generous as what today’s retirees get Strongly Disagree Disagree Agree Strongly agree To what extent do you agree or disagree with each of the following statements about Social Security? Social Security Base: Workers Q.38
  26. 26. 2626 By Worker Generation To what extent do you agree or disagree with each of the following statements about Social Security? Q. 38 Social Security Base: Workers, "I’m expecting some Social Security benefits when I retire but nothing as generous as what today’s retirees get." Workers By Generation Total Workers Baby Boomer Gen X Millennial % % % % Net: Agree 66 51 71 72 Strongly agree 21 15 21 28 Agree 45 37 51 44 Disagree 22 32 19 17 Strongly Disagree 12 16 10 11 Net: Disagree 35 49 29 28
  27. 27. 2727 By Worker Generation To what extent do you agree or disagree with each of the following statements about Social Security? Q. 38 Social Security Base: Workers, "I’m expecting the equivalent of what Social Security pays today when I retire." Workers By Generation Total Workers Baby Boomer Gen X Millennial % % % % Net: Agree 49 64 43 41 Strongly agree 15 24 12 11 Agree 33 41 31 30 Disagree 31 24 34 32 Strongly Disagree 21 11 23 27 Net: Disagree 51 36 57 59
  28. 28. 2828 By Worker Generation To what extent do you agree or disagree with each of the following statements about Social Security? Q. 38 Social Security Base: Workers, "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
  29. 29. 2929 By Worker Generation As a percentage of your income, how does that compare to the past twelve months? Base: Workers Q. 40 401(k) Contribution Compared to Past Twelve Months 12% 11% 7% 10% 47% 59% 72% 59% 41% 30% 22% 31% Millennial Gen X Baby Boomer Total Workers Lower Same Higher
  30. 30. 3030 By Worker Generation As a percentage of your income, how does that compare to the past twelve months? Base: Workers, at employer 1 year or longer (93%) Q. 40 401(k) Contribution Compared to Past Twelve Months 11% 10% 6% 9% 49% 60% 73% 61% 40% 30% 21% 30% Millennial Gen X Baby Boomer Total Workers Lower Same Higher NEW
  31. 31. 3131 By Workers 11% 16% 22% 13% 22% 8% 8% 1-2% 3-4% 5-6% 7-9% 10-14% 15-19% 20-25% About what percentage of your personal income does this contribution represent? Personal Deferral Rate Base: Workers who expect to contribute to their 401(k) (96%) Average: 8%, Median: 7% Q. 41 NEW
  32. 32. 3232 By Worker Generation About what percentage of your personal income does this contribution represent? Personal Deferral Rate Base: Workers, expecting to contribute to their 401(k) (96%) Q. 41 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
  33. 33. 3333 By Worker Generation 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? Recommended Contribution Base: Workers Q. 42 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
  34. 34. 3434 By Workers How likely would you be to increase the proportion of your income you contribute to your 401(k) if ... Base: Workers Q. 43 Increasing Your 401(k) Contribution 15% 11% 8% 10% 7% 9% 25% 21% 13% 10% 9% 10% 34% 37% 38% 31% 33% 32% 19% 22% 28% 32% 34% 28% 7% 10% 13% 17% 18% 21% You learned that others of your age and income were saving a bigger proportion of their income than you are You had an emergency fund for unexpected expenses You reduced your overall spending You paid down debt you owe You got a raise You had to increase your contribution rate to get the maximum matching contribution from your employer Not Likely At All Not Very Likely Somewhat Likely Very Likely Absolutely Certain NEW
  35. 35. 3535 By Worker Generation 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 How likely would you be to increase the proportion of your income you contribute to your 401(k) if ... Increasing Your 401(k) Contribution Base: Workers, "Absolutely Certain or Very Likely" Q.43
  36. 36. 3636 By Workers 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. Base: Workers, contributing below the maximum allowed to 401(k) (89%) Q. 44 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 NEW
  37. 37. 3737 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 By Worker Generation 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. Major Reasons for Contributing Below the Maximum Base: Workers, contributing below the maximum allowed to 401(k) (89%) Q.44
  38. 38. 3838 By Workers To take full advantage of this match 63%To take partial advantage of this match 22% On factors other than the match terms 15% To what extent is your contribution rate determined by this match? Influence of Match on Contribution Base: Workers, expecting an employer match (86%) Q. 46 You set your contribution rate ... NEW
  39. 39. 3939 By Worker Generation 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 To what extent is your contribution rate determined by this match? You set your contribution rate ... Influence of Match on Contribution Base: Workers, expecting an employer match (86%) Q.46
  40. 40. 4040 Made positive decision to enroll 85% Enrolled automatically with the choice to opt out 15% 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? Automatic Enrollment Base: Workers Q. 47 NEW
  41. 41. 4141 By Worker Generation 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? Automatic Enrollment Summary Base: Workers, * Automatically enrolled Q. 47, 48 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 NEW
  42. 42. 4242 By Workers 10% 10% 10% 12% 9% 8% 10% 2% 31% 2% 3% 4% 5% 6% 7% 8% 9% 10+% At what contribution rate do you think you would have opted out instead of enrolling? Opt-out Rate Base: Workers enrolled automatically (15%), Average 7% Q. 49 NEW
  43. 43. 4343 By Worker Generation At what contribution rate do you think you would have opted out instead of enrolling? Opt-out Rate Base: Workers enrolled automatically (15%) Q. 49 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 NEW
  44. 44. 4444 By Workers Set at current level 85% Goes up automatically each year 15% 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? Automatic Escalation Base: Workers Q. 50 NEW
  45. 45. 4545 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? Base: Workers Automatic Escalation Q. 50 By Worker Generation 81% 85% 90% 85% 19% 15% 10% 15% Millennial Gen X Baby Boomer Total Workers Set at current level Goes up automatically each year NEW
  46. 46. 4646 By Workers Please indicate the extent to which you agree or disagree with each of the statements below about automatic enrollment in 401(k) plans. Base: Workers enrolled automatically (15%) Q. 51 Attitudes About Automatic Enrollment 26% 16% 7% 4% 6% 46% 41% 24% 18% 16% 20% 31% 51% 53% 51% 9% 12% 18% 24% 27% I wish my employer had enrolled me at a lower contribution rate I wish my employer had enrolled me at a higher contribution rate I am satisfied with the contribution rate at which my employer 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 that my employer automatically enrolled me Disagree Completely Disagree Somewhat Agree Somewhat Agree Completely NEW
  47. 47. 4747 By Worker Generation 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 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 Base: Workers enrolled automatically (15%), "Agree Completely or Somewhat" NEW
  48. 48. 4848 By Worker Generation Counting this employer and any others you may have had, for how many years have you been contributing continuously without interruption to a 401(k)? Years Contributing to 401(k) Base: Workers Q. 52 Workers By Generation Total Workers Baby Boomer Gen X Millennial % % % % Under 1 7 5 4 11 1-2 12 5 10 23 3-4 13 6 10 22 5-6 13 9 11 20 7-9 10 7 11 11 10-14 17 14 24 10 15-19 11 14 15 2 20-24 9 15 11 1 25-29 5 11 4 0 30+ years 5 14 1 0 Average # 10 15 11 5 Median # 8 15 10 4 NEW
  49. 49. 4949 By Worker Generation 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 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.. #1 Funding Financial Priority Base: Workers, Ranked at least one item (98%) Q.55
  50. 50. 5050 By Worker Generation 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 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.. #1 Funding Financial Priority (cont’d) Base: Workers, Ranked at least one item (98%) Q.55
  51. 51. 51 Agenda  Economic climate  Workers: focus on Millennials  Millennial eligible non-participants in 401(k) plans  Retirees  Descriptive information  Segment Profile Summaries
  52. 52. 5252 By Workers and Retirees Which of the following types of asset allocation funds do you own? Q. 82 Asset Allocation Funds Owned Base: Own Asset Allocation Funds 62% 26% 26% 23% 41% 27% 40% 36% A balanced fund which includes both stocks and bonds in a fixed proportion Target risk funds, usually labeled conservative, moderate or aggressive, indicating the level of risk you are prepared to accept Target date funds, usually with a year in their name, indicating the year in which you retired or might expect to retire, for example 2025 or 2045. A blend of target date and target risk funds Retirees (24%) Total Workers (58%) NEW
  53. 53. 5353 By Worker Generation Which of the following types of asset allocation funds do you own? Q. 82 Asset Allocation Funds Owned 41% 40% 36% 27% 58% 36% 23% 22% 39% 37% 39% 27% 31% 45% 39% 32% A balanced fund which includes both stocks and bonds in a fixed proportion Target date funds, usually with a year in their name, indicating the year in which you retired or might expect to retire, for example 2025 or 2045 A blend of target date and target risk funds Target risk funds, usually labeled conservative, moderate or aggressive, indicating the level of risk you are prepared to accept Total Workers Baby Boomer Gen X Millennial Base: Own Asset Allocation Funds (58%) NEW
  54. 54. 5454 By Worker Generation 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 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 Base: Own Target Date Funds (38%), Excluding Not Applicable NEW
  55. 55. 5555 By Worker Generation 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 True of Target Date Funds (cont’d) 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 Base: Own Target Date Funds (38%), Excluding Not Applicable NEW
  56. 56. 5656 By Workers and Retirees All things considered, how satisfied are you with: "Very Satisfied" with Investments * Base: Own Target Date Funds Q. 84 Workers By Generation Retirees Total Workers Baby Boomer Gen X Millennial % % % % % The target date fund or funds you hold * 41 23 9 29 22 Investments apart from target date funds you hold 29 22 23 22 22 Your investment portfolio overall 38 26 25 28 26 NEW
  57. 57. 5757 By Workers and Retirees All things considered, how satisfied are you with: Q. 84 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 NEW
  58. 58. 5858 By Worker Generations How much debt does your household have when it comes to student loans? Q. 93 Student Loan Debt Workers By Generation Total Workers Baby Boomer Gen X Millennial % % % % None 69 87 69 49 Less than $1,000 1 0 1 3 $1,000 to < $5,000 7 4 5 11 $5,000 to < $15,000 7 3 7 10 $15,000 to < $25,000 5 2 4 9 $25,000 to < $50,000 5 2 5 8 $50,000 to <$500,000 7 2 8 9 $500,000 or more 0 0 0 0 Average $ in thousands (Excluding None) $38 $27 $50 $31 Median $ in thousands (Excluding None) $17 $12 $20 $16
  59. 59. 5959 By Workers and Retirees 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? Direction of Debt Base: Have debt $1,000 or more Q. 94 Retirees Total Workers Baby Boomer Gen X Millennial % % % % % Net: Top 2 Box 17 17 21 17 15 Much larger 3 6 8 6 4 Somewhat larger 14 12 13 11 11 About the same 35 33 27 34 35 Somewhat smaller 38 38 42 36 37 Much smaller 10 12 10 12 14 Net: Bottom 2 Box 48 50 52 48 51 NEW
  60. 60. 6060 By Workers and Retirees How soon, if ever, do you expect to pay this debt down to zero? Paying off Debt Base: Have debt $1,000 or more Q. 95 Workers By Generation Retirees Total Workers Baby Boomer Gen X Millennial % % % % % Have Debt 50 74 64 77 80 Under 1 year 12 11 12 10 11 1-2 years 22 17 15 16 21 3-4 years 16 14 15 13 17 5-6 years 19 24 25 24 22 7-9 years 2 3 0 4 4 10-14 years 11 13 14 13 11 15+ years 9 10 7 13 10 Never 9 8 12 8 5 Average number of years (Excluding never) 6 6 6 7 6 Median number of years (Excluding never) 4 5 5 5 4 NEW
  61. 61. 6161 By Worker Generation 11% 6% 5% 4% 3% 79% 7% 2% 2% 2% 1% 88% 12% 6% 4% 4% 3% 80% 14% 8% 10% 6% 4% 70% Taken a loan against a 401(k) Taken a hardship withdrawal from a 401(k) Cashed out a 401(k) and paid the taxes due Taken a premature distribution from an IRA Accessed funds in a 529 education account for non- educational purposes None of these Total Workers Baby Boomer Gen X Millennial In the past year, has any member of this household: Early Withdrawals Q.96
  62. 62. 6262 By Workers and Retirees Which social media sites, if any, do you access at least once a week? Q. 97 Social Media Usage Workers By Generation Retirees Total Workers Baby Boomer Gen X Millennial % % % % % Facebook 65 74 59 76 85 YouTube 24 45 21 45 68 LinkedIn 13 26 28 26 22 Google+ 12 21 11 21 30 Twitter 11 27 10 32 38 Instagram 5 19 4 17 38 None, I do not access social media sites 27 13 26 11 4 Average # Sites Used (Excluding none) 1.8 2.4 1.8 2.4 2.9

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