The results of the Sixth Annual Transamerica Small Business Retirement Survey show that employees in their 20s want more retirement planning education and advice from their employers and their participation in company plans will remain low until they get it, according to a press release.
An overwhelming majority of those polled (93%) think that plans such as 401(k)s are an important workplace benefit and are just as likely as older workers to have asked superiors in the workplace about such plans.
However, despite the overwhelming sentiment that they are a good idea, only 37% of such Echo Boomers with access to such plans actually utilize them, according to the survey. By comparison, 75% of Gen Xers and 85% of Baby Boomers use such plans if they have access to them. Even when they do use such plans, Echo Boomers are more likely to simply guess at how much they need for retirement, and are less likely to use tools such as worksheets to help them find the actual number. When compared to the other age groups in the survey, Echo Boomers expected to need less for retirement ($536,000) than Gen Xers ($938,000), and Baby Boomers ($832,000).
“It’s not surprising that the participation rate among Echo Boomers is low given their age and competing financial priorities,” said Catherine Collinson, retirement and market trends expert for the Transamerica Center for Retirement Studies. “What they may not realize is that they may be getting off track with their retirement savings before they even get started. Through the power of compounding, the dollars they save in their 20s have the longest time to grow and will have a tremendous impact on the size of their retirement nest egg.”
Echo Boomers admit their ignorance about such plans, however. Eighty-eight percent agree that they do not know as much as they should about retirement investing and 71% would like to receive more information about it.
Echo Boomers are also skeptical about their employers when dealing with retirement plans, according to the report. One in four Echo Boomers think that their company does not care at all about helping them attain a secure retirement and doubt that their employer manages such accounts with the Echo Boomers’ best interest in mind.
The Survey is available at http://www.ta-retirement.com/resources/2004Transamerica%20Report.pdf .