"Best prepared for retirement." That's not a superlative one might expect to describe Millennials, but according to the J.D. Power 2018 Group Retirement Satisfaction Study, it's true.
Millennials are most likely of all demographic groups to have set specific retirement goals and have the highest amount of savings-relative to age-in group retirement plans.
The inaugural study evaluates participant satisfaction with providers of group retirement plans, such as 401(k)s, based on six factors: interaction across live and digital channels; investment and service offerings; fees and expenses; plan features; information resources; and communications.
Plan providers are ranked in three categories based on their overall mix of business in terms of average plan size.
Here are some key findings of the 2018 study:
- Yes, Millennials are most prepared for retirement: Among all generations of group retirement plan members, 51% of Millennials have set specific retirement goals, compared with just 44% among both Gen X and Boomer participants.
- Of the 51% of Millennials who have set goals, 83% say they believe they are on track to meet them.
- Boomers missing the mark: Nearly two-thirds (61%) of Millennials have at least $25,000 in total retirement savings, and 27% of them have more than $100,000, with an average of 30-35 years before retirement.
- By contrast, 75% of Boomers have more than $100,000 in savings with an average of just three years until retirement age. The average Boomer will hit age 65 with just 3.4 years of current income saved, far short of the 10 years some experts recommend.
- Just one-fifth of 401(k) participants plan to roll over to current plan providers: While there is an enormous "money in motion" opportunity looming, just 20% of current group plan participants say they "definitely will" roll over those assets to their current plan provider in the future.
- However, when plan participants are digitally engaged, aware of guidance and education resources, and experience transparency around fees, the likelihood that they will roll over their assets to their group plan provider increases to 48%.
Charles Schwab ranks highest in group retirement plan satisfaction in the large plan segment (824). Nationwide ranks highest in the mixed plan segment (770) and PNC Retirement Solutions ranks highest in the small plan segment (806).
The 2018 study is based on responses from more than 9,500 group retirement plan members. The study was fielded in February-March 2018.
For more information about the 2018 Group Retirement Plan Satisfaction Study, visit http://www.jdpower.com/resource/us-group-retirement-satisfaction-study.