than half couldn’t say they were making
good financial decisions; yet, a significant number were not seeking any guidance. Sixty-two percent of Gen Xers and
57 percent of Gen Yers couldn’t say if they
were making good decisions about their
finances.
savings, apart from their bank
accounts.
However, four out of 10 are
cashing out assets from their
workplace-savings plans when
they change jobs. When using savings vehicles beyond
their everyday savings account,
their workplace-savings plan
( 54 percent Gen Xers, 46 percent Gen Yers) is No. 1, far outpacing IRAs, CDs and stock/
bonds/mutual funds.
Fifty-two percent of Gen
Yers plan to leave their jobs
within five years, with 31
percent of Gen Xers making
the same statement. When
changing jobs, 40 percent of
Gen Xers and Yers cash out
their workplace-retirement
plans.
“For many young peo-
ple, workplace-savings plans are often
their very first experience with investing,” says Scott B. David, president of retirement services, Fidelity Investments.
“While it’s encouraging to see that more
than half are saving through their workplace plan, the cash-out rate is concerning. Employers and service providers
FOUR OUT OF 10 ARE CASHING OUT ASSETS
FROM THEIR WORKPLACE SAVINGS PLANS
WHEN CHANGING JOBS.
When it comes to turning for help and
guidance on financial matters, parents
are the No. 1 resource for both generations ( 43 percent Gen Yers and 28 percent
Gen Xers). However, nearly one in five
didn’t turn to any resource for help on financial matters. In fact, when changing
jobs, 41 percent didn’t seek any guidance
regarding their workplace-retirement assets. Of this group, 56 percent cashed out
their workplace savings plans.
High cash-out rate
For both Gen Xers and Yers, a workplace-retirement plan such as a 401(k)
plan or a 403(b) plan is the No. 1 tool for
need to work together to help this generation understand the long-term implications of cashing out and options to
help their money to potentially continue
to grow.”
CMI conducted an ethnographic research of 40 adults between the ages of
21 to 35 across four geographic markets. The results from the ethnographic
work informed a broader quantitative
research study conducted by Burke
Inc., which consisted of about 1,200 financial decision-makers (ages 20-40) in
the U.S., with at least $15,000 in annual income. For more information, visit
www.Fidelity.com.
