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For financial professional use only. Not for further distribution. Document must be used in its entirety. TEA-PRE-ATNG-LOVING-WFA (18877) 03/17
The millennial mindset
Attracting the next generation
The Funds are distributed by Delaware Distributors, L.P., an affiliate of Macquarie Investment Management Business Trust (MIMBT), Macquarie Management Holdings, Inc., and Macquarie Group Limited. Macquarie Investment Management (MIM), a
member of Macquarie Group, refers to the companies comprising the asset management division of Macquarie Group Limited and its subsidiaries and affiliates worldwide.
Other than Macquarie Bank Limited (MBL), none of the entities noted are authorised deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL.
MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.© 2017 Macquarie Management Holdings, Inc.
Diane OakleyExecutive DirectorNational Institute on Retirement Security
Ajamu C. Loving, PhD. President and CEOLoving Consulting
Speakers
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INSERTPHOTO
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Millennials: Who are they?
• Born early 1980s to early 2000s
• One-third of the U.S. population (projected to overtake boomers this year)
• Most educated generation in history (61% attending college)
• 42% are non-white
Source: Nielsen and The White House Council of Economic Advisors, 2014
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
• 15% were born in a foreign country (largest since 1920)
• 36% are homeowners (lowest level for <35 age since started recording)
• 30% live at home (compared to 22% in 1980)
• Much less likely to marry as compared to prior cohorts
Millennials: Who are they?The Millennial Mindset
Source: Census Bureau and The White House Council of Economic Advisors, 2014
Millennials: Where Do They Work?
Education Is the Top Industry with 8.4 Percent
5
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Impact of political and economic events
Source: S&P 500 - https://finance.yahoo.com/q/hp?s=%5EGSPC+Historical+Prices
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
1990 1995 2000 2005 2010 2015
Gulf War1990-1991
Great Recession2008-2009
9/112001-2003
Dot-com bubble1997-2000
Afghan War2001-2014
Iraq War2003-2010
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
4
5
6
7
8
9
10
11
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Employment instability
Source: U.S. Bureau of Labor Statistics, 2016. Y axis in thousands
U.S. 10-year unemployment rate
1,501,000 in the 20-24 age range 1,905,000 in the 25-35 age range
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015
Average debt per borrower in each year’s graduating class
Student loan debt
Source: Mark Kantrowitz | WSJ.com
Impact: 2/3 Working Millennials Have Nothing Saved in Retirement Accounts
9
• Working Millennials between the ages of 21 to 32.
• Research used the Survey of Income and Program Participation (SIPP).
Four out of Five Millennial Latinos Have Nothing Saved in Retirement Accounts
10
Millennials Similar Rates of Access to Plan, But Only 1/3 Participate. Why?
11
Access Participation
Eligibility to Participate in Employer’s Retirement Plan Is Barrier for Millennials
12
Eligibility
Millennials Employed As Part-Time Employees at Nearly Twice Rate of Previous Generations
13
Higher rate of part-time employment by Millennials is large factor in their lower eligibility for employer-sponsored plans.
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
?The Millennial Mindset
So what has this created?
Millennials with Retirement Accounts Have Median Balance of $19,100
15
These values only include working Millennials with accounts with a positive balance of $1 or more.
Of Millennials Saving for Retirement, Only 15% Are Saving Enough According to Expert Recommendations
16
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Perception is important
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Perception is importantThe Millennial Mindset
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
• Preference for financial guarantees
• Fear around Social Security stability
• Likely to support aging parent
• Led to earlier savings
Risk aversion
Average Age Began Saving
Millennials 22
Gen X 27
Baby Boomers 35
The Millennial Mindset
Source: U.S. Chamber of Commerce Foundation, 2012 and Transamerican Center for Retirement Studies, 2014
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Millennial investment breakdown
Source: UBS Wealth Management, 2014
52%
28%
23%
46%
0%
10%
20%
30%
40%
50%
60%
Cash Stocks
Millennials Non-Millennials
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
What are they saving toward?
Source: Better Money Habits Millennial Report, Bank of America/USA Today, 2014
32%
59%
42%
25%
33%
0% 10% 20% 30% 40% 50% 60% 70%
Buying a house
Emergency fund
Retirement
A new car
Vacation / travel
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Millennials are slated to inherit $30 to 40 trillion dollars from their predecessors
Command an estimated $1.3 trillion in annual consumer spending• Will have the largest buying power of any cohort by 2017
Almost 1 in 3 entrepreneurs are between the ages of 20 and 35
Why do you care?The Millennial Mindset
October 3, 2018 | 22
Millennials’ High Take-Up of Employer Plans Provides Hope That Savings Rates Will Improve
23
Can Millennials Catch Up for Early Lost Years? To Saving Enough to Retire at Age 65 after Waiting 20 Years, Means More Than Doubling Up
24Source: J. Poterba, 2014, “Retirement Security in an Aging Society, NBER
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Whom do they trust for advice?
Source: UBS Investor Watch, Think You Know the Next Generation Of Investors? Think Again., 2014
41%
26%
14%
4%
14%
40%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Parents Friends Financial Advisor
Millennials Non-Millennials
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Start with your current clients
• Attach your brand to something they are excited about.
What can you do?The Millennial Mindset
What Can Be Done? Recommendations To Improve Retirement Savings for Millennials
1. Expand eligibility in employer plans and create State-Based Retirement Savings Programs
2. Reduce waiting periods, cover part-time and allow workers to contribute upon employment.
3. Increase auto-enrollment and defaults into retirement accounts
4. Increase employer matches and educate workers on the benefits of an employer match
5. Promote the Saver’s Credit, especially in State-Based Plans.
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
Focus On The NowIntertemporal choice – give now focused actions to solve future problems.
• Spend time assessing where they are rather than exclusively focusing on the future
Segmented planning is likely needed• Cash flow management
• Investment management
• Employee benefits
• Goal development
• Budgeting
The Millennial Mindset
For financial professional use only. Not for further distribution. Document must be used in its entirety. TEA-PRE-ATNG-LOVING-WFA (18877) 03/17
Contact informationMacquarie Investment Management
2005 Market StreetPhiladelphia, PA 19103-7094
Individual investors:800 523-1918
Advisors:877 693-3546
For more information visit delawarefunds.com
This presentation is for educational purposes only. Please consult your compliance departments before accessing any social media networks for a business purpose.The presentation is for illustrative purposes only and is not an endorsement of any app, service, or publicly traded company. This presentation is not a recommendation to buy or sell a particular security.The views expressed are those of Dr. Nathan Harness, Ph.D., CFP of Nathan Harness Consulting, LLC. and have been adapted, with his permission, for the use of Macquarie Investment Management (MIM), formerly Delaware Investments, and its employees.Dr. Harness agrees to hold MIM harmless from any claims of intellectual property rights infringement that may arise out of MIM’s use of the foregoing materials.
The Funds are distributed by Delaware Distributors, L.P., an affiliate of Macquarie Investment Management Business Trust (MIMBT), Macquarie Management Holdings, Inc., and Macquarie Group Limited. Macquarie Investment Management (MIM), a member of Macquarie Group, refers to the companies comprising the asset management division of Macquarie Group Limited and its subsidiaries and affiliates worldwide.Other than Macquarie Bank Limited (MBL), none of the entities noted are authorised deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
CAR 0317-03467
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
References9. Class of 2015 Has the Most Student Loan Debt In U.S. History, Market Watch, 2015. http://www.marketwatch.com/story/class-of-2015-has-the-most-student-debt-in-us-history-2015-05-08
10. The Millennial Generation Research Review, U.S. Chamber of Commerce Foundation, 2012. http://www.uschamberfoundation.org/millennial-generation-research-review
11. 15 Facts About Millennials’ Retirement Readiness…and 7 Steps For Long-Term Success, Transamerican Center for Retirement Studies, 2014. http://www.transamericacenter.org/docs/default-source/resources/center-research/tcrs2014_factsheet_millennials.pdf
12. Millennials: Confident. Connected. Open to Change., Pew Research Center, 2010. http://www.pewsocialtrends.org/2010/02/24/millennials-confident-connected-open-to-change/
13. Next Generation Strategies for Advertising to Millennials, comScore, 2012. http://www.comscore.com/Insights/Press-Releases/2012/1/comScore-Releases-Report-Next-Generation-Strategies-for-Advertising-to-Millennials
14 The New Challenge for the Next Generation of Financial Planners, ThinkAdvisor, 2014 http://www.thinkadvisor.com/2014/04/15/the-new-challenge-for-the-next-generation-of-finan?page=3
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For educational purposes only. Please refer to the last slide for important disclosures and information.For financial professional use only. Not for further distribution. Document must be used in its entirety.
References1. Millennials: Breaking the Myth, Neilsen 2014. http://www.nielsen.com/us/en/insights/reports/2014/millennials-breaking-the-myths.html
2. 15 Economic Facts About Millennials, Whitehouse Council of Economic Advisor, 2014. https://www.whitehouse.gov/sites/default/files/docs/millennials_report.pdf
3. CPS/HVS, 2014 http://www.census.gov/housing/hvs/data/histtabs.html
4. Young Adults: Then and Now, Census Bureau, 2014. http://www.census.gov/censusexplorer/censusexplorer-youngadults.html
5. Unites States Youth Unemployment Rate 1955 – 2015, Trade Economics, 2015. http://www.tradingeconomics.com/united-states/youth-unemployment-rate
6. Millennials Less Trusting of Others”, Pew Research Center, 2014. http://www.pewsocialtrends.org/2014/03/07/millennials-in-adulthood/sdt-next-america-03-07-2014-0-05/
7. Think You Know the Next Gen Investor? Think again.” UBS, 2014. http://www.ubs.com/content/dam/WealthManagementAmericas/documents/investor-watch-1Q2014-report.pdf
8. Better Money Habits Millennial Report, Bank of America/USA Today, 2014 http://about.bankofamerica.com/assets/pdf/bmh-millennial-report.pdf
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