Myths about certain groups of workers—namely, GenXers and millennials—are impeding the understanding of employers about how those workers engage with their defined contribution plans, making the plans less effective.

So says new research from State Street Global Advisors, which found “surprising similarities” between the two age groups—a demographic that SSGA has christened “Generation DC” because it is the first cohort to rely predominantly on a defined contribution plan as their primary source of retirement funding.

In a survey it conducted on plan employees ages 22–50, the company said that, regardless of respondents’ ages, more than 80 percent of employees understood that creating a successful retirement depends on making it a priority and starting early.

Here are five myths about the demographic that SSGA says need to be debunked so that retirement savings plans will be more successful.

Myth #1. Millennials would rather interact with apps than with humans.

Not true, says SSGA.

They want the apps, sure, but when it comes right down to it, at least once a year they want to interact with a living, breathing person—even more than older employees do, according to the research.

While 38 percent of GenXers ages 45–50 want that human interaction, 59 percent of those ages 22–25 say they “want an in-person meeting once a year and technology isn’t really going to help.”

Employers, says SSGA, need to pick up on that and realize that the younger folks need a human hand at the tiller when it comes to steering them right on retirement.

Myth #2. Millennials don’t care about saving for retirement, because it’s too far into the future to worry about.

Also not true.

In fact, 88 percent of millennials agree that it’s important to start saving early for retirement.

Among Gen Xers, that number actually falls to 86 percent. Both groups, however, agree that retirement saving is a priority, with a combined average of 83 percent.

SSGA suggests that employers work on tying that awareness to specific actions for employees, such as plan enrollment or increasing contributions.

Myth #3. Most people are “over” the financial crisis.

So not true.

Among millennials, 54 percent say that the scars of their parents’ experience during the financial crisis of 2008 has hit their confidence as investors.

Respondents ages 33–39 have been marked even more severely; 60 percent report that they’re still shaky about it.

Employers should tackle volatility head-on, SSGA said, talking to employees about it and explaining the concept of “staying the course” to try to prevent them from joining the buy-high-sell-low crowd.

Myth #4. Employers are the top of the food chain in informing and influencing their employees.

Nope, not even close.

Friends and family occupy the top slot, with 75 percent of millennials ages 22–25 crediting family, friends and coworkers with setting their feet on the path to retirement saving.

Those Gen Xers ages 45–50? Forty-nine percent of them, too, lay the credit at their friends’ and families’ doors.

Employers might be able to spur conversations among employees and their family members about retirement savings, but they don’t control those conversations.

Myth #5. Employers need to educate people about retirement and investing.

While people need to learn the ins and outs of financial literacy, employers aren’t necessarily the ones to provide it—sometimes experience fills that role.

SSGA said that it used a standard battery of questions to test literacy, and the results indicate that as people hit their 40s their literacy about basic financial and investing improves.

Respondents who were asked if buying a single company stock provided a safer return than a stock mutual fund, and only 46 percent of millennials correctly answered that the stock was more risky.

However, 57 percent of Gen X ers answered correctly and that increased to 77 percent for the 45+ group.

Perhaps the fact that 63 percent of millennials ages 22–25 said that they “manage their financial life mostly by intuition” has something to do with that.

Instant Insights /

5 retirement savings myths about Gen X and millennials

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