Client Service May 31, 2017

Millennials Have Lofty Retirement Goals

They are saving aggressively to retire early, despite obstacles, and they are actively seeking information to guide their financial decisions.
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U.S. Millennials (born between 1980 and 1997) expect to retire at age 58—earlier than those in any other western market globally—and are taking a number of steps to make it happen, according to HSBC’s latest Future of Retirement research.

To help achieve their earlier retirement goal, the research found that 80% of U.S. Millennials have already started saving for their retirement, with another three-quarters (75%) citing plans to cut expenses to save more for retirement.

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Nearly half of U.S. Millennials surveyed are willing to take on more risk in their investments to generate wealth. The research also found that investment appetite across other generations is stark. Only 27% percent of Gen X and 13% of Baby Boomers are willing to take on the same risk profile.

According to the study, U.S. Millennials are yearning to learn, with 63% actively seeking information to guide their financial decisions, compared to 49% of Gen X and 34% of Baby Boomers.

Despite their expectations and efforts to retire early, economic challenges and longer life expectancy present significant challenges to Millennials’ retirement plans.

HSBC wealth planning expert Brian Schwartz explains, “While Millennials are broadly aware of the economic and demographic challenges they face, they do not appear to have grasped how these factors could hinder their efforts to retire early and comfortably.”

For example, the vast majority of respondents (82%) anticipate higher health care costs in the future, while an additional 56% are concerned about declining social safety nets like state pensions and Social Security. Overall, respondents also anticipate that Millennials will live longer than previous generations, suggesting they will to need save for a longer retirement (62%).

Other key findings from HSBC’s Future of Retirement research include:

  • 73% of working age people in the U.S. would defer retirement for two or more years to have a better retirement income;
  • 65% of working age people in the U.S. anticipate working to some extent during retirement; and
  • 46% of working age people in the U.S. would work for longer or get a second job to save more for retirement.
This is the fourteenth Future of Retirement report in the series and represents the views of 18,414 people from 16 countries and territories. The findings are based on a representative sample of people of working age (21 and older) and in retirement, in each country or territory. The research was conducted online by Ipsos MORI between November 2016 and January 2017.
Products May 31, 2017

Health Equity Solution to Integrate 401(k)s and HSAs

HealthEquity’s new services will aim to combine wealth and health management for participants.
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HealthEquity announced it will be rolling out a new suite of 401(k) services that can be integrated with health-savings accounts (HSA) and other consumer-driven health accounts.

The firm will initially offer two health and wealth solutions. The first includes a full-scope 401(k) that aims to reduce costs, risk and compliance workload for employers. The second connects existing retirement plan solutions from third parties to HealthEquity’s HSA. Both offer new tools for plan advisers to help participants leverage health and retirement accounts.

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“Health and retirement benefits are evolving in the same direction,” says Jon Kessler, HealthEquity president and CEO. “Value increasingly depends on employees making smart decisions based on long-term goals. Tying consumer-driven health and retirement together will help more employees see the full picture, create and execute a highly personalized plan.”

HealthEquity also announced it has entered into an agreement to acquire the assets and retain the team members of BenefitGuard. Based in Orem, Utah, BenefitGuard specializes in streamlined 401(k) solutions.

“By combining our services with HealthEquity, our goal is to provide a solution for employers and advisers that will integrate HSAs into overall financial education, enabling an entirely new approach to an individual’s health and wealth management,” says Matt Bradley, BenefitGuard’s CEO.

Subject to customary conditions to closing, HealthEquity expects the BenefitGuard acquisition to close in the third quarter of its current fiscal year. 

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