Benefits March 15, 2011
Majority of Gen Y not Saving for Retirement
March 15, 2011 (PLANSPONSOR.com) - The majority (55%) of Gen Yers have not started to save for retirement, and fewer than a quarter (21%) are actively planning for retirement, according to a survey commissioned by online investing firm Scottrade.
Reported by Rebecca Moore
The survey shows 60% of Gen Yers (born 1983-1991) saved nothing toward retirement last year and 40% plan to save nothing in 2011. An additional 21% plan to save only one to two percent of their income this year.
According to a press release, when asked what age they’d recommend people start saving for retirement, Gen Yers recommended a mean age of 29.2 years old, giving even the oldest of the group two more years before this generation thinks they need to start saving.
The survey indicates Gen Y’s lack of action doesn’t stem from lack of awareness or interest. Almost three-fourths of Gen Yers (73%) realize that they are not saving enough for retirement.
“What Gen Y may not realize is that older generations based their retirement planning on the three-legged stool of Social Security, savings and employer pensions,” said Craig Hogan, director of customer intelligence at Scottrade, in the press release. “The approach their parents and grandparents took toward saving is no longer appropriate because the old model doesn’t exist. By the time Gen Y retires, they may have only one reliable leg to stand on – their own savings – and they need to plan accordingly.”