When talking to employer clients and their employees about retirement, it’s important that advisers understand the differences between generations.

The youngest generation in the workforce, millennials tend to view retirement planning with a pessimistic attitude, said Natalie Wyatt, vice president of business development at Innovest Systems, LLC. “These people don’t think they’re going to retire,” she said Monday at the ASPPA Annual Conference in National Harbor, Md.

Also see: "Top 10 states for financial well-being."

Knowing employees’ mindset in the workplace is also crucial, said Sarah Simoneaux, a consultant at Simoneaux and Stroud Consulting Services. Here’s a breakdown she gave of each generation:

  • Baby boomers: They want to be told what to do.
  • Generation X: They want to know what to do and the deadline. Then, they want to be left alone.
  • Generation Y: They want to know what to do, when to have it finished and how to do it. They also want to know why. Millennials like to figure out a better way of achieving the task, like to work with friends and have a fear of failure.

Also see: "5 myths about millennials and retirement."

Loyalty also differs between Gen X and Gen Y. The former is loyal to their family. “We love the work-life balance,” Wyatt said. Whereas millennials are loyal to “their people,” Simoneaux said, adding that Gen Y employees will stay at a job and earn less money if they have someone, such as a mentor, that they enjoy working with. 

Also see: "How retirement advisers can engage millennials." 

When discussing retirement with millennials, advisers should reframe the conversation around financial independence, Simoneaux said. Younger employees want access to their money, she said, and offered Roth IRAs as a good selection for millennials. “We way undersell Roth to X’s and Y’s,” Simoneaux said.

That’s because the word “Roth” can be off-putting, she said. Instead of mentioning this foreign word, advisers should talk about the specifics of these IRAs, such as tax-free accessibility to money and how it grows, without uttering the word “Roth,” Simoneaux said.

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