The study found that Gen X and Gen Y consumers who work with financial professionals to make investment decisions are more likely than those who do not to be very knowledgeable about investments and financial products (14% versus 6%). Yet, only one in five work with a financial professional.
Among Gen X and Gen Y consumers with access to a defined contribution (DC) plan through their employer, those who have never made contributions are more likely to feel less knowledgeable about investments and financial products than those currently contributing to their DC plan.
On average, Gen X consumers have contributed to their current employer’s DC plan for nine years, accumulating nearly $70,000. The median deferral rate is 6% for all Gen X consumers, but slightly higher for men (7%). Given that Gen X consumers are older than age 30, their deferral rates are typically recommended to be above 10%; however, less than half (43%) are contributing 8% or more.
On average, Gen Y consumers have contributed to their current employer’s DC plan for four years, accumulating slightly less than $26,000. The median deferral rate for Gen Y consumers is 6%, with one in five Gen Y consumers contributing 3% or less to their current employer’s DC plan.
“There’s a lot of attention on the Baby Boomers(78 million) but there are nearly 116 million Americans ages 20 to 47, and as an industry we need to help these Americans plan and save for retirement,” said Cecilia Shiner, senior analyst, LIMRA Retirement Research.