Generation Y is more conservative than other generations when it comes to retirement savings.
Thirty-four percent of those between the ages of 18 and 34 said their primary goal for their retirement plan is to ensure their savings will be safe regardless of what happens in the stock market, according to a TIAA-CREF retirement survey.
“Many in Gen Y came of age during the Great Recession, which helped shape their attitudes and outlook on their own finances,” says 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.”
Forty-two percent of Generation Y said their top goal was to have access to guaranteed monthly income to cover their living costs in retirement.
Generation Y also expects to live longer in retirement than other generations, with 34% of respondents saying they expected to live more than 25 years in retirement.
But even though this demographic is concerned that Social Security won’t be around for them and they expressed a wish for safer savings options, 31% of them aren’t saving any money for retirement, “due in part to financial challenges like student loans or jobs that don’t offer retirement plans,” TIAA-CREF found. “This late start could have a significant impact on their long-term savings.”
Sixty-one percent of respondents said they would be willing to devote a portion of their retirement savings to an investment option that provides guaranteed monthly payments during their retirement, compared to 57% for the 35 to 44 age group and 56% of the 45 to 54 age group.
But 75% of Gen Y said they were not familiar with annuities and more than half of all generations said they were not familiar with annuities and did not plan to purchase one.
Thirty-four percent of individuals between the ages of 55 and 64 said they were saving more than 10% of their income for retirement, but 31% said they weren’t saving anything at all.
The survey was conducted by KRC Research among 1,000 adults over the age of 18.
Paula Aven Gladych is a freelance writer based in Denver.
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