The Language of Generations


Are you speaking the “right” language to your retirement plan participants? Do you know the different financial outlooks among Millennials, Gen Xers and Baby Boomers? Studies show the way people tackle saving for retirement is closely tied to generational factors.

Your plan participant program needs to speak to each generation, and the varying outlook of those groups. Here’s a quick rundown on the key characteristics of each generation:

Millennials or Gen Y – Born between the early 1980s and early 2000s, these adults are digitally oriented, shoulder the heaviest student loan debt but have lower wealth levels, and are waiting longer to marry, according to a recent study by the PewResearch. Millennials are also the best educated (hence the heavy student loan debt), tend to live with their parents longer than past generations, and yet are the most optimistic about their financial future.

Gen Xers – Cresting beyond the Millennials to age 49, this group is sometime referred to as the “Sandwich Generation” or “Middle Child” since it’s squeezed between two larger generations. However, according to another PewResearch study, Xers are “savvy, skeptical and self-reliant.”

Baby Boomers – Born after World II through 1964, Boomers are hardworking and much more conservative than they were in their youth. They expect to work well into their late 60s or early 70s, and vary on their retirement outlook depending upon their financial experiences (older Boomers are much more concerned about their finances than younger Boomers).

When it comes to retirement, Millennials are considerably more optimistic about future readiness than older generations. Over 50 percent of Millennials, compared to 30 percent of Gen Xers and 15 percent of Boomers, feel they will have enough money in the future. Yet, Millennials acknowledge that Social Security benefits may be of little help in the future (and many expect the system to fail before retirement).

While one PewResearch study points out that youthful optimism may account for the Millennials’ overall positive financial outlook, there is no denying that both Baby Boomers and Gen Xers have seen more economic downturns and financial uncertainty.

To better serve these varying perspectives, it’s important to offer flexible retirement savings options and let participants define their own goals and solutions. Every generation, really every person, needs to consider their own retirement dreams and plans, how their current and future spending can play a role, and commit to a savings plan to realize those goals.

You can help support these different needs and solutions with ongoing educational tools that address varying ages, household structure, and economic outlooks. And, be sure to do so with diverse communication methods. Many employees are technically adept so it’s also important to realize that more and more people expect information to be readily available 24/7 and are less print-oriented.

You don’t have to be a whiz at generational demographics to be a good 401(k) plan sponsor; just be sensitive to the varying outlooks and needs of your participants and ensure you are working with retirement plan providers that have the products, tools and support to fulfill those needs.