Gone are the days when someone retires from the company that launched their career. The path to retirement that existed for previous generations has changed for Millennials and Generation Xers, and this is changing how young people need to think about retirement planning. The new path forward offers more mobility, but it also comes with greater responsibility.


Since Millennials have grown up during the iPhone age, and Gen Xers have seen rapid technological change, the term “mobility” usually applies to how these groups communicate with the world. In this case, mobility refers to retirement and insurance benefits now offered to U.S. workers.

In response to the high cost of benefits and the impact of the Affordable Care Act, benefits have become portable. Younger workers can stay on their parents’ health insurance until they are 26 years of age. It’s also much easier and more affordable to buy insurance through healthcare exchanges. In addition, workers can’t be turned down for insurance anymore due to preexisting conditions. The result is that workers, especially younger workers, don’t have to be as dependent on their employer for health benefits as in previous generations.

Retirement plans have also followed the same mobility trend. The coveted pension has all but disappeared. Pensions typically provide a check for the remainder of a worker’s life, based on how long they stayed at their job and the worker’s final salary. This dependable stream of lifetime income was an indispensable part of the U.S. retirement system. Between market volatility and longer life expectancies, however, pension plans proved to be too costly for private companies—and now, for many local governments and schools systems—to offer

Pensions were replaced by 401(k), 403(b), and 457 plans as well as Thrift Savings Plans, which offer mobility. Now, when employees leave their jobs, they can take their retirement funds with them in the form of an IRA or by rolling it into another employer-sponsored retirement plan.


All of the factors above make the decision to change jobs and pursue entrepreneurship easier for younger workers, but it also puts the responsibility of retirement planning squarely on their shoulders. Even if they choose to stay put at a specific employer for the long term, it’s important that they are aware of their new level of responsibility and the challenges it presents.

Set savings goals and track progress:

 The challenge is that as younger employees change jobs, it can result in more small retirement accounts spread out among multiple providers. It’s hard enough to set savings goals, but it’s even harder to set goals and understand your progress if you’re dealing with multiple accounts and multiple providers. Consolidating to one retirement plan provider is one way to make things more manageable. Technology like Janney’s My Net Worth account aggregation tool, free to existing clients, can give Millennials and Gen Xers a picture of their finances across accounts, help them track their cash flow to understand their savings ability, and make retirement planning— and financial planning generally—more manageable. Whether they consolidate their accounts or use aggregation tools, setting goals and understanding progress will be younger investors’ responsibility going forward.

Understand the tradeoff between risk and reward:

Research has shown that Millennials and Gen Xers are, on average, more conservative investors than past generations at their age. Their attitudes have been shaped by historic market downturns, as they watched the account balances of their parents and loved ones take substantial hits. But media coverage is often remiss to tell the story of investors recovering their losses and building additional wealth over time. Thus, the challenge is that younger investors are left with only half of the investing story—and an assumption that cash is safer than stocks. But they are also in danger of learning a harsher truth: Over the long-term, by taking on the risk of investing in stocks, investors have historically been rewarded with higher returns. While long-term stock returns are never guaranteed, those who invested in cash most certainly will lose purchasing power over time due to rising costs from inflation.

Consider the other ramifications of mobility:

In addition to impacting retirement planning, changing employers creates challenges for protecting wealth. Past generations depended on their employer to obtain necessary life and disability insurance to protect their loved ones. Today, when younger workers change employers, switch to consulting, or start their own companies, they can find themselves without the necessary insurance products to protect those they care about. Additionally, they may have developed health issues over the years that prevent them from obtaining coverage personally. It’s more important than ever for younger workers to consider purchasing individual insurance policies—to allow them to transition throughout their career, and also protect their loved ones. They will likely never be younger or healthier than they are today!

Seek advice from trusted sources:

 Millennials and Gen Xers are extremely comfortable self-diagnosing a problem or challenge through searching the Web. In many ways, they’re benefitting from having access to more information at their fingertips than any previous generation. However, they may be missing the value of having a trusted source explain how their research relates to their personal situation and retirement goals.

A financial advisor’s value is key in helping these younger clients with: 

  • Setting goals and providing prospective. An advisor can help younger investors assess where they are today, and where they want to be in the future. Importantly, an advisor can provide them with the necessary perspective to see past short-term challenges and focus on their long-term objectives, through retirement and financial planning.
  • Investment selection. Choosing from thousands of mutual funds, ETFs, and individual securities can be overwhelming. An advisor can help younger investors decide what’s most appropriate for their needs, based on factors including diversification, risk tolerance, taxes, fees, and liquidity.
  • Asset allocation. The key to investing successfully is maintaining the right mix of assets, including stocks, bonds, and cash. An advisor’s expertise can be key in helping younger investors understand the tradeoff between risk and reward to ensure proper asset allocation.
  • Monitoring progress. Retirement planning is an ongoing process. Life is constantly changing, and a retirement plan will need to change with it. An advisor can help younger investors make sure they’re where they need to be at every stage, to maximize their financial and retirement opportunities.
  • Protecting your wealth. An advisor can help a young investor decide if they should have personal insurance—so they don’t get caught without coverage later in life. An advisor can review the investor’s insurance coverage as their life and products change— to make sure those solutions still meet their needs. 
  • Keeping accounts up-to-date. Millennials tend to delay getting married and starting families. This has resulted in many young investors naming other friends or family members as their beneficiaries. It’s important for a young investor to review their designated beneficiaries when they move employers or experience a life change, to keep the beneficiaries current.

Positive Change in the Retirement Industry

It’s probably no coincidence that the retirement industry is also undergoing substantial changes at this time. Lowercost products like ETFs have driven investing costs lower. The result is that younger investors have access to more low-cost investing options. New regulations from the U.S. Department of Labor have set into place a best interest standard for the entire investment industry—which must be followed by advisors when providing advice to clients regarding their IRAs and other retirement accounts. These changes will help to reinforce the important roles and responsibilities of advisors to retirement savers of all ages, as they begin and continue their retirement savings plans.

As Millennials and Gen Xers embark on the new path to retirement savings, it’s possible to get derailed by this newly found mobility. Finding the right advisor can help reduce some of the burden of responsibility they now have, in achieving their own financial and retirement security.

This is for informative purposes only and in no event should be construed as a representation by us or as an offer to sell, or solicitation of an offer to buy any securities. The factual information given herein is taken from sources that we believe to be reliable, but is not guaranteed by us as to accuracy or completeness. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation or needs of individual investors. Employees of Janney Montgomery Scott LLC or its affiliates may, at times, release written or oral commentary, technical analysis or trading strategies that differ from the opinions expressed within. 

Asset allocation and diversification do not assure profits or guarantee protection from losses. Past performance is not an indication of future results.

About the author

Jessica Landis

Vice President & Head of Investment Solutions

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