In our latest study, we found some notable differences — and similarities — among millennials, Gen X and baby boomer plan participants. Historically, defined contribution (DC) plans have been framed as retirement savings plans. Here we highlight key research findings reflecting their views on investing and retirement income.
When we asked participants what they thought about investment risk, 64% overall chose “potential for loss” (versus “potential for gain”). This may be why 76% of millennials surveyed identified as either conservative or moderate investors. Younger participants often feared “losing it all.” Staying conservative or moderate with their retirement assets gives them a sense of security.
Participants are genuinely interested in how to turn their DC plan savings into a stream of income, even millennials. They may not be ready to make decisions around retirement income, but it’s important to start building awareness. Most survey participants wanted information from their employers starting at age 45 or younger. However, only two in 10 participants recall receiving communications from their employer on the topic.
There’s an opportunity for plan sponsors to communicate earlier — and better — about the benefits of staying in-plan at retirement. Since most plan sponsors seek to retain assets of retirees, we examined which benefits of staying in the plan resonated with participants. The most compelling benefit is continuing to work with a plan they already trust, followed by convenience and lower costs.
Source: Invesco participant survey, November 2020
Finally, when we presented participants with an option that could turn their retirement plan savings into protected monthly payments for life — for an additional cost negotiated by their employer — millennials even more so found this option to be “very” or “somewhat” appealing.
Download the full infographic to learn more about whether your plan’s language is truly resonating with your participants across the generations.
2024 Defined Contribution Participant Pulse Survey: Insights into the Behaviors, Concerns, and Preferences of Large DC Plan Participants Across the US
In our research, we found three-quarters of plan participants wanted their plan sponsors to start the retirement income conversation earlier.
In our research, we found that a primary financial goal for almost all participants’ DC plan savings was to maintain their pre-retirement lifestyle.
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This material is based on Invesco’s work with Maslansky + Partners. Invesco is not affiliated with Maslansky + Partners.
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