In 2013, New York Life released the results of a survey that included respondents from three generations. Although the survey covered a number of different areas, the responses regarding financial satisfaction were particularly revealing. Approximately 68 percent of the baby boomers expressed satisfaction with their economic situation. Among their children — the generation Xers — 51 percent stated that they were financially satisfied, and for their grandchildren (millennials), the number dropped to just 49 percent. An important element in the lack of financial satisfaction hinged on the perception among millennials that they perceive that the things their grandparents took for granted — home ownership, a comfortable retirement and a steady job providing escalating income — may be much more difficult for them to attain.

The Retirement Picture: Gloomier for Each Successive Generation 

Since millennials began entering the workforce during the first decade of the 21st century, they have been forced to deal with a variety of challenges that were not commonly encountered by the previous two generations. As a group, baby boomers could build a satisfactory retirement plan based on their employers’ pension plan and Social Security, supplemented by a mortgage-free home and relatively little consumer debt. Generation Xers lived through the trend away from employer-provided pensions to employee-funded plans, such as the 401(k). Although home ownership was still within their reach (again, as a group), they have been slower to pay off a mortgage and faster to incur consumer debt. They have also been more inclined to trust that Social Security will provide a retirement income.

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Millennials are Becoming Pessimistic about Obtaining Financial Security

Millennials, on the other hand, express doubt that Social Security will still be available by the time they retire. However, many of them state that they are unable to save for their retirement because all of their earnings must be devoted to more immediate needs — such as buying a house.

Millennials are Typically Saddled with Substantial Debt by Graduation

In addition, millennials are often deeply in debt by the time they earn their degree, thanks to student loans and credit cards used to finance their education. According to the most recent data released by the U.S. Department of Labor, the average cost for attending one year of college at a public university is $19,300 and almost twice that amount at a private college. On average, according to a report by CNN, students graduating in 2013 had education-related debt of $35,200. Amortize this over 10 years with compounding interest — and it is easy to see why many millennials feel they cannot afford to contribute to a retirement plan.

How Employers Can Improve the Outlook for Millennials

There are a number of ways that employers can help millennials make their futures brighter. Many government agencies have recognized assistance with student loans can be an effective way to attract and retain employees. For example, some school districts will help with student loans for teachers who agree to teach at low-income or inner-city schools, and some states offer similar programs for healthcare professionals working in underserved areas. Although employers in the private sector are typically less likely to pay off an employee’s student loan, there are still ways they can help.

Make sure that new hires receive information about any retirement plan that the company sponsors. Provide information on when employees become vested, for example, or the amount of any matching contributions. 

Educate employees on the benefits of starting to save early for retirement. A financial professional, such as a CPA or 401(k) plan administrator, could give a presentation or provide educational literature.

If employees might be eligible for a “forgiveness” program for their student loans, make sure they have the information on the program. Provide them with the necessary forms needed to apply for the program. The Consumer Financial Protection Bureau offers a downloadable toolkit for assisting employees with their student loans that is geared to non-profits and public service or school district employees. 

Offer incentives for employees to complete certain training courses or actions. For example, some businesses offer incentives for meeting with a financial planner, signing up for the company’s 401(k) plan, contributing to an IRA or attending a seminar on managing consumer debt. The incentives could be contributions to the employee’s 401(k) or a monthly payment on the employee’s student loan.

Helping Millennials Secure their Retirement is a Win/Win Scenario

Although some employers feel that it is not their place to concern themselves with their employees’ financial health, it is actually beneficial to the enterprise to do so. Employees who feel financially secure tend to be more productive — and employees who feel that their employers care about them tend to be more loyal. Therefore, even in a troubled economy — and perhaps, especially in a troubled economy — it is sound business sense to help millennials deal with their personal finances in a proactive manner. Such programs can pay handsome dividends over the long term and have a direct impact on the enterprise’s bottom line. In short, these programs can be just as beneficial to the employer as employees.