Helping millennials turn retirement planning dreams into reality

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In 2016, hopeful news came out showing millennials prioritizing their fiscal futures, particularly regarding their retirement security. A poll conducted that year among full-time working men and women between 18 and 34 showed 60 percent saying they’d welcome being paid less if it meant they had more money to retire with. Back in 2009, when a similar study was conducted, only 42 percent had the same response.

At that time, all indications were that the fallout of the Great Recession had kicked this financial planning focus into high gear. This was an exciting trend, but today, as the COVID-19 pandemic impacts careers and student loan levels are rising, 33 percent of millennials surveyed by the Transamerica Center for Retirement Studies have either already borrowed from their retirement savings or plan to.

That was then; this is now

Just as their parents experienced the financially challenging aftereffects of the recession, many millennials did as well, graduating from college at precisely the wrong time. Commencement typically serves as the culmination of a lifetime spent hitting the books, the reward being a diploma and, with any luck, a job offer shortly thereafter. However, with the unemployment rate reaching a high of 10 percent in October 2009, according to numbers maintained by the U.S. Department of Commerce, many millennial college grads could not find work and were forced to move back in with their parents. In 2020, the situation only grew worse as millennials faced a 14.3 unemployment rate for their age group, and 52 percent of individuals under 45 reported being put on leave or losing either jobs or hours.

Concerns about healthcare costs in retirement

A survey by the National Association of Plan Advisors found that retirement healthcare expenses were among the largest areas of concern for millennials, with 74 percent citing “out-of-control healthcare expenses” as a top concern. Today, 43 percent of millennials believe they will have to work past age 65.

The ability to retire on time and in comfort depends on the financial decisions made during our youth. One effective way for your clients to potentially leverage their current investments and create a post-retirement source of income that covers shortfalls in investment performance is through Leveraged Planning®. Leveraged Planning® is a life insurance-based approach to retirement preparation that may result in future income security without the need to liquidate working assets today. For more details, please speak with a GFD Services Manager.