Millennial Mistake

"Millennials prefer life insurance to retirement savings as a workplace benefit." That was the headline on a life insurance company press release, highlighting a study by EBRI, the highly regarded Employee Benefits Research Institute. The report showed that younger workers prefer life insurance and paid time off as much, if not more, than retirement plans.

What a huge and short-sighted mistake. Life insurance will benefit someone else when you die - years from now, according to actuarial statistics. But retirement benefits will help you while you're alive in your older years, a far more likely outcome. Those who live for today will face a bleak tomorrow. Whatever caused this cynical attitude, someone needs to explain to millennials just how destructive it is.

The good news is that Fidelity has stepped up to the challenge, in a typically simple and accessible fashion. They've created a new Personal Retirement Score calculator on their website. Answer six simple questions about your current lifestyle and savings habits. Then click and you'll get your current score - a graphic "dashboard" that lets you know where you stand in terms of reaching needed retirement income.

If you're in the "red zone" (needs attention), you can see the impact of adjustments you could make now to increase your score. You'll see how saving more, investing more aggressively, or adjusting your expected retirement lifestyle could move you into the "green zone" (on track). The good thing about it for millennials is that they have time on their side. Smaller changes in savings behavior will be magnified over time, making it easier to reach retirement goals.

Fidelity's graphic calculator is deceptively simple -- and both hopeful and frightening at the same time! It's not unique in trying to move millennials into saving more and investing more wisely. Every robo-advisor and mutual fund company has some version of this tool on its website. You can't say the financial services industry isn't trying hard - for its own business reasons, and because it's the right thing to do - to get Americans to pay attention to their finances. And it's working - a little.

Along with its announcement of this new Personal Retirement Score, Fidelity released a survey of Americans' retirement readiness. They say that the number of people who are on track to live comfortably in retirement jumped seven percentage points since 2013, from 38 to 45 percent. While comforting, it still means that more than half of Americans won't be able to cover basic living expenses in retirement.

This is the political season. You're bound to hear promises from both parties that the government will be able to do things to make your older years more financially comfortable. Take all that with a grain of salt. In the end, the only thing government can do directly is to "print" more money - or take money away from those who have worked and saved for their own retirement. Those aren't solutions; they simply lower everyone's standard of living.

Millennials need to get a little perspective. Every generation has faced its challenges, whether wars, global unrest, or economic cycle extremes. Ask your elders. We lived through those tough times - and are glad we took advantage of every employee benefit plan and retirement investment opportunity. And we're hoping our heirs won't get to cash in on our life insurance anytime soon!

Tomorrow will come, for the vast majority of the millennial generation. You'll be glad you saved and invested for your future. That's The Savage Truth.