Communicating with Millennials on 401(k) Plans

Schwab conducted a survey where 61 percent of millennial women and 44 percent of millennial men feel they don’t know what their best 401(k) plan investment options are.

While I suppose that I’m a Generation X member, these results are alarming because the retirement savings of the millennial generation is going to be the future of the 401(k) plan business. The point here is that it shows that we have a communication problem between plan advisors and plan participants as to what the best investment options and I believe it’s because the investment education provided to plan participants isn’t enough. These are people who clearly need their hands held to make the best investment decisions they can. It’s not a knock on millennials because I do that by just watching the latest season of Survivor, but there is certainly a major issue in having these people make their own investment decisions,

With the Fiduciary Rule going to be implemented or delayed come April, one thing the Department of Labor should certainly consider is the expansion of investment advice available to plan participants because by the looks of the survey, people from the next generation of 401(k) plan participants are having a rough time in making investment decisions that they can deal with.

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