Baby boomers may be behind millennials in saving for retirement
- Boomers told their millennial offspring to save for retirement, but many boomers didn’t receive that same advice, reports Employee Benefits Advisor. Therefore, millennials are ahead of boomers in saving for life after work.
- Boomers have been caught in the transition companies are making from pensions to retirement investment plans. Rosenthal Wealth Management Group’s president, Larry Rosenthal, told EBA that boomers need a financial plan to start saving.
- EBA says that many financial advisers are recommending health savings accounts to boomers in addition to the traditional 401ks. HSAs can cover healthcare costs for the medical care they will need as they age. Financial advisers also are recommending value funds, which are conservative investments that can withstand volatility in the markets.
Employers can help boomers catch up to millennials by bringing financial experts into the workplace who can educate them about their retirement savings options. Many boomers don’t know what choices they have.
A Fidelity study shows that the average 15-year investment saver is ahead of the game in saving for retirement. They had, on average, $331,200 in their retirement accounts, up from $43,900 in 2001. This increase in savings shows that employees know the advantage of getting into their companies’ 401k plans and making contributions over time.
Medical care is likely to be older employees' largest expense. HSAs are practical savings plans that can be carried over from year to year and that have tax benefits, much like IRAs.
- Employee Benefit Advisor How to help baby boomers add to their retirement savings