Nearly seven out of 10 Millennials (69%) believe individuals have primary responsibility for taking steps to ensure they have a secure retirement, according to a survey of 1,200 investors from Capital Group, home of American Funds.
However, a number of Millennials believe employers (13%) or the government (14%) have the most responsibility for ensuring people have a secure retirement. Millennials see access to a retirement savings plan as a basic expectation from employers. Eighty percent of Millennials believe all employers should be expected to provide a retirement savings option.
Nine out of 10 Millennials (91%) surveyed report that they contribute to a 401(k) or individual retirement account (IRA). Saving for retirement ranks second only to paying the rent or mortgage on Millennials’ financial priorities list. One in five Millennials (22%) rank retirement saving as their number one financial priority.
Three-quarters of Millennials (75%) say their employer does a good job of explaining retirement investing options. Seventy-one percent are aware of employer 401(k) matching contributions as a way to help people save more for retirement.
Millennials tend to worry more about near-term finances like current income (34%), paying off their loans (34%) and paying for their children’s education (31%) than Gen Xers and Boomers. However, Millennials are considerably less worried than Generation X about having enough money to retire: 62% of Gen Xers say that not having enough money to retire keeps them awake at night, compared to 53% of Millennials and 51% of Boomers.
The survey found 72% of Millennial investors say they know exactly or are somewhat confident about what types of mutual funds and investments they have in their retirement accounts.
Millennials say that more investing success would greatly help them to make a change in their life. This includes achieving a better work/life balance (37%), taking time off to try something new (29%) or pursuing a career change (21%). In fact, if they knew for certain that they would have enough money to retire at their planned retirement date, only 10% of Millennials say they would stay in the same career and current lifestyle.
The survey also found Millennials are focused on aligning their investments with social impact. For example, 82% of Millennials say it’s important for companies in their investment portfolio to promote the health and wellness of consumers and employees, and 78% of Millennials believe it’s important for companies in their investment portfolio to reduce harm to the environment and climate.
In terms of investment products that best align with their retirement savings objectives, half of Millennials list mutual funds with a long-term track record of outpacing the stock market average (30%) or doing better than the market during downturns (19%). In addition, nearly one-quarter of Millennials (23%) say target-date funds are the best approach for their goals.
The full survey report, “New Workforce Natives: Millennials’ Attitudes on Work, Retirement and Investing,” is here.
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