Schwab Survey: Millennials Face Unique Set of Obstacles When Saving for Retirement

Occasional Indulgences & Student Loan Debt Keeping Young People from
Saving More

SAN FRANCISCO–(BUSINESS WIRE)–A new survey finds that Millennials, more than any other group, may not
be saving enough for retirement because they are unwilling to sacrifice
things that add to their current quality of life – and because many are
also burdened by student loan debt.

The nationwide survey of 1,000 401(k) plan participants, commissioned by
Schwab Retirement Plan Services, Inc. identifies key differences in both
attitudes and behaviors of Millennials (those under age 35), Generation
Xers (those between 35 and 49 years old) and Baby Boomers (those between
50 and 70 years old) when it comes to saving for retirement.


The survey found that Millennials face several obstacles to meeting
their retirement savings goals, which disproportionately affect this
group more than any other. Moreover, although this younger generation
believes they would benefit from help, they are using professional
investment advice far less than their older counterparts. Specifically:

  • 44 percent are not saving more because they want to treat themselves
    to things like occasional dinners out and vacations, more than Gen
    Xers (34%) and Boomers (29%).
  • More than a third (37%) can’t set aside more money for retirement
    because they are still paying off student loans.
  • About half of Millennials (49%) feel that they don’t know what their
    best investment options are, and only a third (34%) are extremely or
    very confident in their ability to make the best 401(k) investment
    decisions on their own.
  • While three-quarters (76%) claim they would like help managing their
    401(k), only 22 percent are likely to seek out professional investment
    guidance, and just 7 percent are currently receiving it.

“Managing a 401(k) can often be intimidating for young people who have
little to no investing experience,” said Catherine Golladay, vice
president of participant services and administration at Schwab
Retirement Plan Services. “Our survey found that six in ten Millennials
wished there was an easier way to choose the right investments for their
401(k). Getting professional investment advice early on can go a long
way toward easing some of this anxiety, boosting confidence and getting
people started on the right foot.”

Generation X

Survey respondents representing Generation X, while more established in
their careers but not yet approaching retirement, have their own set of
unique conditions affecting their ability to save. In particular:

  • Like Millennials, Gen Xers’ greatest obstacle to saving more for
    retirement is an unwillingness to sacrifice their current quality of
    life (34%). A close second, though, is wanting to save for their
    children’s education (32%).
  • Only 58 percent know how much they need to have saved for a
    comfortable retirement and only 53 percent believe they are saving
    enough to retire when they want to.
  • Gen X is the group most likely to have taken a loan from their 401(k):
    31 percent have done so, compared to just 13 percent of Millennials
    and 29 percent of Baby Boomers.

“Borrowing from a 401(k) is like stealing from your future self,” notes
Golladay. “A 401(k) loan can severely derail your savings plan and comes
with steep tax penalties if you leave your job and can’t repay the loan,
so it should be viewed as a last resort for everyone, regardless of age.”

Baby Boomers

The group nearest to retirement, Baby Boomers, are not as adequately
prepared as they should be. They also tend to be more concerned with the
health aspects of retirement than the financial pressures. In particular:

  • Only 63 percent believe they are saving enough to retire when they
    want to. Similarly, only 65 percent think they’ll be retired
    comfortably in 15 years, while another 22 percent say they’ll be
    retired, but not comfortably.
  • Even with retirement looming, a third (33%) don’t know how much they
    should have saved for a comfortable retirement.
  • More Baby Boomers are currently getting 401(k) investment advice than
    any other generation: 20 percent, compared to 7 percent of Millennials
    and 10 percent of Gen Xers.
  • On the whole, this group is more concerned about being healthy enough
    to enjoy retirement (61%) than having enough money to enjoy it (39%).

“As the survey results show, at every stage of life, people have
competing priorities that may interfere with their ability to retire
comfortably at the end of a long career,” concluded Golladay. “While
balancing financial responsibilities can be a tall order, saving in a
401(k) should remain at the top of the priority list.”


Questions to 401(k) Participants


(Under 35)


Gen Xers



Do you agree that you…


Would like personalized 401(k) investment advice?

76 % 64 % 62 %

Think you’re saving enough to retire when you want to?

56 % 53 % 63 %

Don’t know what your best investment options are?

    49 %   39 %   35 %
What keeps you from saving more for retirement?

Not willing to sacrifice things that add to quality of life

44 % 34 % 29 %

Need money to pay basic monthly bills

30 % 28 % 20 %

Want to save for a child’s education

27 % 32 % 10 %

Still paying off student loans

    37 %   14 %   6 %
Have you ever taken out a loan from your 401(k)?    









What will be happening in 15 years?

You will be comfortably retired

4 % 22 % 65 %

You will be retired, but not comfortably

    2 %   9 %   22 %
Are you very or extremely confident in your ability to make the
right 401(k) investment decisions on your own?









Are you very likely to seek out professional help to make the
best 401(k) investment choices?









Are you currently getting professional 401(k) investment advice?    









Do you know how much you’ll need to have saved for a comfortable









What concerns you more?

Having enough money to enjoy retirement?

59 % 52 % 39 %

Being healthy enough to enjoy retirement?

    41 %   48 %   61 %

About the Survey

This online survey of U.S. 401(k) participants was conducted by Koski
Research for Schwab Retirement Plan Services. The survey is based on
1,000 interviews and has a three percent margin of error at the 95
percent confidence level. Survey respondents worked for companies with
at least 25 employees, were current contributors to their 401(k) plans
and were 25-70 years old. Survey respondents were not asked to indicate
whether they had 401(k) accounts with Schwab Retirement Plan Services.
All data is self-reported by study participants and is not verified or
validated. Respondents participated in the study between May 26 and June
3, 2015. Additional findings can be found on our research

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Charles Schwab
Mike Peterson, 330-908-4334
Neil Shapiro, 212-754-5423