Finally, there is some good news about millennials and retirement saving that financial advisers can build upon.
A new survey by T. Rowe Price Associates Inc. has found that millennials are focused on saving for retirement despite having college debt to pay off. In fact, they save an average of 8% of their income compared with the 9% of income saved on average by baby boomers.
Considering that baby boomers are rapidly approaching retirement while millennials have many working years ahead of them, this high rate of saving by the millennials is laudable, and likely will increase as their finances improve as they move through their careers.
SAVINGS LAUDABLE
Millennials, perhaps because they have seen the impact of the Great Recession on their families and their own early careers, understand the need to budget and to save. That means their savings will accumulate rapidly, especially as they dispose of their college debt.
Advisers can build on this awareness, and millennials' growing savings pool, and they should start reaching out to this generation now if they have not already done so. Millennials might not realize they need professional guidance at present, but they likely can be persuaded of that as their assets grow.
BUDGETEERS
Millennials, be-ing budget conscious, also might be reluctant to pay for the advice that would be useful to them at present, but that too might change as their incomes increase along with the complications of managing their growing retirement savings.
Advisers might not be able to sign up many millennials as clients today (indeed many advisers probably don't want to, given the small asset bases most millennials have — see above), but these young investors obviously are fertile ground for advisers' recruiting efforts. Advisers should be reaching out through all available means, including, of course, social media, to provide information and education. Those who get their names before millennials in this way now will reap the harvest in the future.
