Millennial Workers Are On Pace to Have More Retirement Income
February 19, 2020 at 09:00 AM EST
More workers than ever are saving more toward their retirement and millennials are quickly catching up to older generations when it comes to contribution and participation rates, according to new research released by Principal Financial Group®1.
The Driving Plan Health report conducted by Wells Fargo Institutional Retirement and Trust, which was acquired by Principal in 2019, indicates all three key retirement plan health measures – participation, contributions and diversification – show significant gains over the last five years. Millennial workers in particular appear to be quickly catching up to boomers when it comes to contribution and participation rates.
“Seeing such significant growth among these critical plan health measures tells us more people depend on defined contribution plans to save for their retirement,” said Renee Schaaf, president of retirement and income solutions at Principal®. “With millennials looking to replace more of their retirement income with their DC plan accounts, we have a tremendous opportunity and obligation to help them save enough so they can have enough in retirement.”
Millennials on pace to have more retirement income than previous generations
Factors for this include:
“Overall, we’re encouraged by the positive trends uncovered in this year’s report,” Schaaf adds. “Increases in participation and contribution rates combined with the passage of the SECURE Act should help drive momentum over the next five years.”
About the 2019 Driving Plan Health report
For the past five years, Driving Plan Health has explored the roles demographics, plan design, participant communications and online tools and resources play in affecting the outcomes measured by the Plan Health Index. This year, the report expanded its purview to look at how to help participants succeed not just in getting to retirement but creating an income stream in retirement.
To learn more about Principal and our retirement plan solutions, visit: https://www.principal.com/employers/employee-benefits/retirement-plans
Insurance products and plan administrative services provided through Principal Life Insurance Co., a member of the Principal Financial Group®, Des Moines, IA 50392.
1 The material contained within was co-created by Principal and Wells Fargo Institutional Retirement and Trust (IRT). Information presented originates from existing Wells Fargo IRT client data and is shared in accordance with IRT client relationship permissions.
Principal Financial Group closed the acquisition of certain assets of the Wells Fargo Institutional Retirement and Trust business (IRT) on July 1, 2019. The transition, transfer, and conversion of IRT business operations, employees, and clients will occur over the following 12-24 months. During the transition period, Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company, will continue to operate and service the IRT business for the benefit of Principal®, including providing recordkeeping, trustee, and/or custody services.
2 Participants ages 50 and older.