Look around — there’s a lot less gray hair in the workplace these days. According to a Pew Research Center study, millennials outnumber both Gen X and Baby Boomers, who are retiring and leaving their positions. This generational shift toward a younger client base with diverse financial needs poses a unique challenge for employee benefit advisers. Advisers must adapt their methods to support the financial and communication differences.

If your employer clients foresee a similar shift over the next few years, brokers must assess and strengthen their tactics to account for these common concerns in order to help young employees understand the importance of a retirement plan and early contributions. Here’s what they need to know:

Re-focus financial priorities: Live for the future, not just the present
As traditional retirement age is decades away, not many millennials give it serious consideration early on in their careers. While their individual financial priorities vary, Millennials tend to live in the moment and lack the knowledge and forethought necessary for successful financial and retirement planning.

Make the case for retirement contributions early in your communication with young employees. Emphasize that even small amounts — like a few hundred or thousand dollars a year — can improve their financial wellbeing over the course of a career. Include visual representations and simulations to illustrate the advantages of regular contributions and increased return.

Balance financial obligations: Smart strategies to budget for tomorrow, today
Young professionals must balance existing obligations — like student or car loan payments — with the responsibility of newfound financial independence. A Million Dollar Round Table study revealed despite a desire to eventually retire, 91% of millennials have no financial plans for retirement. Future financial security is a low priority, if it even makes it to the budget in the first place. It’s a challenge for young employees to live on their own for the first time and focus on retirement planning.

Identify realistic tactics that will allow current and future obligations to co-exist in their financial strategies for a more manageable, realistic approach. Help clients understand their retirement is something that should be factored into existing budgets, just like their present-day responsibilities. Perhaps a graduated or tiered retirement planning model will appeal to them.

Payments that increase in proportion with salary and other financial obligations may enable employees with financial obligations like student loans to pay smaller amounts at first to build momentum. As they pay down debts and earn more money, plan contributions can increase in kind.

Increase financial literacy: Build confidence, independence
Be prepared to educate young professionals about their options for retirement planning. If possible, share a list of educational resources to cover the basics in employee welcome kits, communication and in-person meetings. Millennials don’t have the necessary experience or financial background, and may require more coaching than you’re used to with more mature retirement-age employees. Empower them to ask questions and offer neutral advice supported by easy-to-understand materials.

A hands-on approach that helps young employees feel confident, empowered and supported to plan for their future retirement is the best way to overcome challenges and become an invaluable resource for your clients. Take the steps necessary to build millennials’ confidence and make them feel good about their decision to secure their financial futures.

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