The Website and Blog of HR Author and Speaker Lori Kleiman

401(k) a Key Benefit for Millennials

401k

HR professionals see a paradigm where people are working longer and assuming the millennials in their workforce are just focused on today. That view has validity and is distorted at the same time. People are working longer – and while millennials are focused on today – they see a future that includes early retirement and the need for funds to support it. They want to be able to travel and participate in activities that will take resources in the future. Many of our current employees see a retirement that will include part time and work and consulting. And there is a general realization among the American population that in order to retire in the future they need to savie early in order to provide the resources they will need to enjoy life in retirement!

A recent study in CNN Money shows the workers of today are starting to save for retirement a decade earlier than their baby boomer counter parts. At the same time, they are saving more aggressively at higher rates. The research from Transamerica Center for Retirement Studies is filled with relevant data business and HR professionals can use to understand their employee population and ensure that benefit programs offered are relevant and timely to the needs of their employee population.

Communication is a key component of retirement planning. According to the study, 73% of Millennials are asking for more information and advice from their employers on retirement planning. Many of us might think, “But if I hold a meeting no one will come.” You’re right – a group meeting with a boring speakers is not what millennials consider communication. Think about sending out apps they can access, or holding a Google hangout a few times a year with your investment adviser. You might be surprised how many of the millennials show up! The study sites that 71% of millennials find the mobile applications provided by the 401(k) vendor to be helpful. Are you providing your employees with easy information to download in multiple formats?

Two-thirds of Generation X and Millennials anticipate that their retirement will be funded by accounts they established. Differentiating your organization as a valuable partner in creating those accounts can be a key to recruiting and retention activities for your HR team. Communicating beyond your plan will provide a connection that you are looking to help employees beyond your benefits. The Department of Labor has good information that can be shared with employees wanting to learn more.

As you look at the annual retirement audit and expenses incurred due to your retirement plan – understand how they can provide value to the organization as well as your employees. There should be an ROI expected from all your benefits and recruiting and retention can be a significant contribution to the 401(k) plan if utilized.

Photo by Tax Credits used under the following license.

1 Comment
  1. Lori – thanks for sharing this information. It certainly changed what I thought was the Millennials’ approach towards 401(k)s and retirement.