“Ah, youth…that period in your life when you think you know everything, but you really don’t even know what you don’t know…but should. Oh, wait…” said a smiling 59-year-old John Logan, CEO of SafeGuard Guaranty and online publisher of the new retirement planning focused website retirementsavings.us. “That was my generation, not the young adults of today.”

A new study* of more than 3000 millennials by retirementsavings.us points to a wide disparity in the way that those just embarking into the workforce and/or early on in their careers think about their financial future and how, while they may not know everything, the reputation of millennials as slackers, at least with regard to saving for retirement, is anything but true.

Of those surveyed, 75% percent actively save for retirement. Mostly in 401(k)s and IRAs (more than three quarters) but only because they were, in most cases with a 401(k), automatically enrolled and there are few investment alternatives for a simple retirement account that offer any real safety. And they are clearly concerned about the future having already lived through two market downturns and growing up constantly hearing that Social Security is in crisis.

As a result, some, just over 20%, are “super savers,” socking away as much as 20% of their paychecks in various forms of savings and investment accounts. But the reason is clear, about half (49.3%) said they’ll be surprised if they get anything back from Social Security, and an additional 7% said they fully expect Social Security to be “a thing of the past” by the time they retire.

Over 65% of those that don’t save for retirement were over age 40
Interestingly, of those surveyed that said they don’t currently save anything for retirement (just under 25%), more than 65% were over the age of 40. The biggest reason being not that they didn’t have access to a retirement savings plan (just under 19%) but rather that “day to day bills are so high I need every penny I make to stay out of debt” (60%)
56% of those that do save, feel the need to learn more about retirement planning/saving alternatives that are available to them. And while just over half knew the difference between a Defined Contribution Plan and a Defined Benefit Plan, 46% said they “have no clue” how an annuity works.

26% said they know more about different kinds of craft beers than what stocks are held in their 401(k)
When it comes down to their default retirement vehicle, 401(k)s, the staple of the Boomer generation’s retirement funding gets a lot less respect from Millennials. Only 13% said they expect their 401(k) to be the lynch pin of their future financial security. But they’re also honest about their sense of ignorance when it comes to understanding how 401(k)s work, 26% said they probably know more about the different kinds of craft beers they drink than what stocks are held in their 401(k).

Don’t fault them for that lack of knowledge however, in 2012 the SEC conducted a study regarding financial literacy among investors and what they found was that, in general, even active investors “have a weak grasp of elementary financial concepts [like how compound interest works] and lack critical knowledge of ways to avoid investment fraud.” So they’re not alone.

93% expect to do all their research and financial services purchases online in the near future
Surprisingly, despite all the hype, only 18% think so-called robo-advisors are the best way to invest. But 93% expect that, if they can’t already, they’ll soon be able to get any advice they need, at will, from advisors and experts, to make smart savings and investment decisions – and purchases – all online via their smart phone, tablet or laptop.
When asked what characteristics they would consider “most important” in a financial/retirement plan, they know that have time to recover from minor losses.

“I’m willing to accept some risk if I have the opportunity to make a lot more money over time” got the largest response in terms of importance at 32%. But “A guarantee of no loss of principal” wasn’t far behind at just over 29%.

And when asked to choose the characteristics they would want in a “designed for me” retirement plan, 3 times as many chose those characteristics that describe a Defined Benefit Plan (annuity/cash balance plan/pension) as those of a Defined Contribution Plan (401(k), IRA) despite the fact that only a few (8%) invest in one right now.

Finally, most (62%) expect to work longer than age 70 before they retire. However, a full 14% expect to retire (from their first career) before age 55.

What comes next will be exciting to watch.