Retirement plans
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Retirement plans: Why millennials need investment guidance

Six in ten millennials say they would cash money out of their retirement plans in the event of a large market downturn (in which the major market indices decrease 10% or more). This new Cogent Syndicated report is from Escalent which shows plan participants are growing increasingly weary in today’s volatile market.

This translates to an opportunity for firms to quickly intervene and provide guidance and reassurance to plan participants.

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Providers of retirement plans play a critical role

“These findings underscore the overarching need for increased education and investment guidance, especially as anxiety around market volatility and inflation persist,” said Sonia Davis, senior product director at Escalent.

“Retirement plan providers and investment managers play a critical role quantifying retirement savings goals, connecting participants with resources to ensure confidence, and ultimately, encouraging them to stay committed to the long game for their personal financial betterment.”

These are the latest findings from Escalent’s DC Participant Planscape™ report, which helps defined contribution (DC) plan providers maximise participant contributions, enhance engagement, leverage cross-sell opportunities and attract rollover dollars.

Financial wellness programmes have proved instrumental in creating more confidence and retirement readiness, with users citing significantly higher confidence rates in achieving their retirement savings goals.

One-third (35%) of financial wellness programme users are extremely confident in their ability to achieve their respective retirement savings goals—double the rate among non-users (17%). Confidence levels are most pronounced among millennials (42% of users vs 15% of non-users) and Gen Xers (30% of users vs 15% of non-users).

Participants are seeking an array of financial wellness offerings, with Gen Xers and 2nd Wave Boomers at the helm. Participants indicate the program options they find most helpful include having access to retirement income planning, Social Security and Medicare advice, a financial advisor, and online access to financial planning tools.

While a large proportion of millennials are considering pulling out of their retirement in the event of a market downtown, they are also at the helm of exploring new investment options for their portfolio. Nearly half of millennials (49%) are extremely interested in investing in ESG inside ESRPs, a notable uptick from 44% last year.

More plan participants are also jumping into digital assets, such as cryptocurrency—at 36% of respondents compared to 23% in 2021. Millennials lead the way in the category with 61% investing in crypto.

To learn more about the DC Participant Planscape™ report, visit escalent.co.

About DC Participant Planscape™

Cogent Syndicated, a division of Escalent, conducted an online survey of a representative cross section of 4,011 DC plan participants from May 10 to June 1, 2022. Survey participants were required to be 18 years or older and contribute at least 1% to a current plan and/or have $5,000 or more in at least one former plan.

Targets were set to investor gender, region, age, education and household income using US census data filtered by the screening criteria (a market-sizing flyover survey was used to filter the US census data). The data have a margin of error of ±1.55% at the 95% confidence level. Escalent will supply the exact wording of any survey question upon request.

About Escalent

Escalent is an award-winning data analytics and advisory firm that helps clients understand human and market behaviors to navigate disruption and business transformation. As catalysts of progress for more than 40 years, their strategies guide the world’s leading brands.

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They accelerate growth by creating a seamless flow between primary, secondary, syndicated, and internal business data, providing consulting and advisory services from insights through implementation.

Based on a profound understanding of what drives human beings and markets, they identify actions that build brands, enhance customer experiences, inspire product innovation and boost business productivity. Visit escalent.co to see how we are helping shape the brands that are reshaping the world.

CONTACT: Kim Eberhardt
248.258.2333
keberhardt@identitypr.com

– Globe Newswire, Livonia, Michigan

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