Millennials and baby boomers are saving — just not for retirement

With COVID forcing many of us to live in the present, it’s no surprise future plans are taking a back seat.

That goes for savings, too: just 5% of millennials and 13% of baby boomers are prioritizing their retirement savings, according to a recent survey by Time2play. Additionally, 44% of millennials and a third of baby boomers have no retirement savings at all.

These attitudes may point to a lack of personalized education when it comes to money and savings, says Deb Boyden, head of U.S. defined contribution at asset management firm Schroders.

“The retirement industry needs to think differently about how they reach investors that have the mindset of living in the moment,” Boyden says. “They need help translating their savings today into what that means for the future.”

The survey found that millennials and baby boomers do want to save, but it’s to cover immediate financial needs: 53% of millennials and 61% of baby boomers say an emergency fund is the most important thing they can save for. And when it comes to spending, both groups were prioritizing spending money on travel, home improvement projects and self-care items like clothes and makeup.

Read more: Millennials save for retirement years earlier than boomers — because they have to

Boyden says employees may need help visualizing what their money can buy them in retirement, so it’s less of a lump sum and more of a “real life scenario.” That can be applied not just to savings, but how employees invest, too.

“Personalized investing helps people see, if they invest in this, what that means for them in retirement,” Boyden says. “This helps them see what not investing means for their retirement.”

The Time2play survey revealed that both groups are savings-minded: half of millennials began saving at 17-years-old or younger, whereas almost a quarter of baby boomers waited until their 30s. However, 95% of millennials and 90% of baby boomers wish they had more saved.

Employers can step in and provide personal finance education around budgeting, both for the short- and long-term. Ninety percent of employees believe employer-provided financial benefits would help them feel more invested at work, according to a survey from Morgan Stanley at Work. Seventy-nine percent of HR leaders believe employees will quit without financial wellness offerings, the Morgan Stanley report found.

Read more: Employees want financial wellness more than they want PTO

To prevent employees from falling victim to that “live in the now” attitude, Boyden says it’s all about balance. Understanding how today’s decisions can impact what happens decades from now may be hard to picture, but important if employees want to reach the financial finish line.

“We have to think about how to communicate with these different demographics in the workplace,” Boyden says. “Savings doesn’t have to be all or nothing — making some mental adjustments can have a profound impact on your retirement savings.”