Many long-held beliefs about how Millennials and Gen Xers engage with their defined contribution plans are merely myths that need to be debunked, says Fredrik Axsater, senior managing director at State Street Global Advisors.
For example, while conventional wisdom seems to think millennials would rather interact with apps and smartphones than human beings, SSGA's research proves that this is generally untrue. The reality is that millennials want human interaction when preparing for retirement even more than older employees do. According to SSGA, 59% of those aged 22 to 25 say they "want an in-person meeting once a year and technology isn't really going to help," compared to 38% for Gen Xers between the ages of 45 and 50.
The second myth refuted by SSGA is that millennials don't care about planning for retirement because it is simply too far into the future. In fact, 88% of Millennials agree it's important to start saving for retirement early, a number that is in line with the 86% for their older Gen X counterparts.
The third myth SSGA discredited is that most people are "over" the financial crisis. The truth is that 54% of millennials admitted that their parents' experience with the 2008 financial crisis impacted their confidence as investors.
Myth number four is that employers are in control when it comes to influencing employee retirement decisions. The reality is, according to SSGA's survey, friends and family are first when it comes to influence. The survey says 68% of Generation Xers said friends and family were the ones who told them to start saving.
Finally, Axsater says there is a pervasive myth that people need more education about retirement and investing.
"Traditional financial literacy education -- learning about stocks and bonds -- is largely ineffective," said Axsater. "What works is simple best practices, or rules of thumb."