Why are younger people saving?
In a recent LIMRA study, Sowing the Seeds for Retirement: Gen X and Gen Y Markets, fewer than half of Gen X consumers selected retirement as their top reason to save (46 percent), and a larger proportion of Gen Y consumers ranked saving for vacation or travel as more important than saving for retirement (chart).
Given that most of Gen X and Y consumers will have to rely primarily on their savings to fund their years in retirement (only 16 percent have defined benefit plans1), there seems to be a lack of understanding on the importance of systematically saving throughout their careers and the benefits of compound interest.
What’s more concerning, only 43 percent of Gen X women and 27 percent of Gen Y women listed retirement as one of their top three reasons for savings. Since women are likely to live longer and often make lower wages than their male counterparts, it is even more critical that they start saving early so that they have enough saved to ensure their financial security throughout retirement.
How does our industry help educate and convince the 116 million Gen X and Y consumers in the U.S. that saving for retirement should be a financial priority?
Member companies can learn more about the findings of this survey by reading: Sowing the Seeds for Retirement: Gen X and Gen Y Markets (2013).
Non-members/press may contact LIMRA Public Relations for more information.
12010 Survey of Consumer Finances