NEW Professional Member Special>>> Save $20 and receive a SHRM tote bag
More companies are recognizing the importance of giving employees the time and space they need to navigate personal loss.
Save $20 on a New Professional Membership and receive a FREE Tote bag when you join SHRM today!
Learn to overcome challenges and meet your 2017 goals through competency-based HR education. Available in-person and virtually.
Expand your influence and learn how to become an effective leader. Join us in Phoenix, AZ | OCTOBER 2 - 4, 2017
Analysis of Generation Y participants—born between 1979 and 1991—in defined contribution plans revealed stronger selection of target-date funds and Roth 401(k) options compared to other age groups, according to data from Fidelity Investments, a large retirement plan services provider.
In the second quarter of 2012, Fidelity analyzed its approximately 11.9 million 401(k) accounts, including 2.2 million Generation Y participants. Among the findings, members of Generation Y were more likely than older participants to:
The number of employers offering a Roth 401(k) rose to 35 percent in 2012 from only 10 percent five years earlier, the study found. Large employers were more likely to offer a Roth 401(k) option, and as a result more than half (55 percent) of all participants in the study were in plans that offered a Roth 401(k), up from 15 percent five years earlier.
In plans that offer a Roth 401(k), use of the savings option was greatest among Generation Y participants, with 8.8 percent contributing to them vs. 5.8 percent among all active participants.
Too Many Saving Too Little
A separate survey of 3,370 defined contribution plan participants conducted in the first quarter of 2012 by Diversified, another large 401(k) services provider, found that:
The good news is that 38 percent of participants reported that they had increased the amount of money they are saving for retirement in 2012 over 2011. And while 11 percent took a loan against their plan over the past 12 months, just 3 percent said they took a permanent hardship withdrawal.
Retirement Income Guesses
In another finding, more than one-third of participants (34 percent) either “guessed” or “made up” estimates for the income they will need in retirement, and only 30 percent said they consulted with a professional for help setting their goals.
“There’s no reason to guess,” Patricia Advaney, senior vice president, participant solutions for Diversified, told the press. “With the abundance of help available—from online tools to guidance to advice—it’s much easier today for plan participants to calculate a retirement income goal, and then take appropriate actions to get there.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Related SHRM Articles:
SHRM Online Benefits Discipline
SHRM Online Retirement Plans Resource Page
Sign up for SHRM’s free Compensation & Benefits e-newsletter
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Join SHRM's exclusive peer-to-peer social network
SHRM’s HR Vendor Directory contains over 3,200 companies