Millennials are Better Prepared for Retirement than Their Parents, J.D. Power Finds
Millennials are Better Prepared for Retirement than Their Parents, J.D. Power Finds
Inaugural Group Retirement Satisfaction Study Evaluates Participant Satisfaction, Goal-Setting and Savings Trends among 401(k) Plan Participants
COSTA MESA, Calif., May 24, 2018 /PRNewswire/ -- "Best prepared for retirement." That's not a superlative one might expect to describe Millennials,(1) but according to the J.D. Power 2018 Group Retirement Satisfaction Study,(SM) released today, 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.
"The fact that many in the youngest generation of plan participants are actively preparing for retirement now sends a clear message to providers," said Mike Foy, Senior Director of the Wealth Management Practice at J.D. Power. "They need to be focused on upping their game on their digital and mobile offerings to meet the expectations of this digitally engaged customer segment, not only to help differentiate themselves with plan sponsors who make provider selection decisions on behalf of the employees, but to position themselves to benefit from rollover events when employees eventually leave their jobs. With roughly $5.3 trillion in wealth currently sitting in 401(k) plans, getting the group plan participant satisfaction formula right now is crucial for the future of the wealth management industry."
Following 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%.
Study Rankings
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.
See the online press release at http://www.jdpower.com/pr-id/2018072.
J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power is headquartered in Costa Mesa, Calif., and has offices serving North/South America, Asia Pacific and Europe. J.D. Power is a portfolio company of XIO Group, a global alternative investments and private equity firm headquartered in London, and is led by its four founders: Athene Li, Joseph Pacini, Murphy Qiao and Carsten Geyer.
Study Rankings
Overall Satisfaction Index
Score Ranking JDPower.com Power Circle Ratings(TM)
(Based on a
1,000-point
scale) for Consumers:
Large Plan
Segment
Charles Schwab 824 5
Bank of America
Merrill Lynch 808 4
Vanguard 805 4
T. Rowe Price 791 3
Large Plan
Segment Average 788 3
Fidelity
Investments 787 3
Wells Fargo 776 2
Prudential
Financial, Inc 774 2
Power Circle
Ratings Legend
5 - Among the
best
4 - Better than
most
3 - About average
2 - The rest
Study Rankings
Overall Satisfaction Index Score
Ranking JDPower.com Power Circle Ratings(TM)
(Based on a
1,000-point scale) for Consumers:
Mixed Plan Segment
Nationwide 770 5
TIAA 764 4
Mixed Plan Segment
Average 744 3
ICMA-RC 743 3
Voya Financial 735 2
Empower Retirement 734 2
Transamerica 730 2
Small Plan Segment
PNC Retirement
Solutions 806 5
Securian Financial
Group 782 4
American Funds 779 4
MetLife Resources 779 4
Alliance Benefit
Group 776 4
OneAmerica 773 4
John Hancock
Retirement Plan
Services 765 4
Mutual America 763 4
The Standard 758 3
ADP Retirement
Services 756 3
Small Plan Segment
Average 751 3
Ascensus 748 3
AXA 745 3
MassMutual 745 3
CUNA Mutual
Retirement
Solutions 743 3
Principal Financial
Group 742 3
Lincoln Financial
Group 740 3
Newport Group 738 3
VALIC 722 2
Paychex, Inc 718 2
Power Circle Ratings
Legend
5 - Among the best
4 - Better than most
3 - About average
2 - The rest
Media Relations Contacts
Geno Effler; Costa Mesa, Calif.; 714-621-6224; media.relations@jdpa.com
John Roderick; St. James, N.Y.; 631-584-2200; john@jroderick.com
About J.D. Power and Advertising/Promotional Rules www.jdpower.com/about-us/press-release-info
(1) J.D. Power defines generational groups as Pre-Boomers (born before 1946); Boomers (1946-1964); Gen X (1965-1976); and Gen Y (1977-1994); and Gen Z (1995-2004). Xennials (1978-1981) and Millennials (1982-1994) are subsets of Gen Y.
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SOURCE J.D. Power
