the millennial mindset...for financial professional use only. not for further distribution. document...

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

2

INSERTPHOTO

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


• 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


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


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


$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.


?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


Perception is important


Perception is importantThe Millennial Mindset


• 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


Millennial investment breakdown

Source: UBS Wealth Management, 2014

52%

28%

23%

46%

0%

10%

20%

30%

40%

50%

60%

Cash Stocks

Millennials Non-Millennials


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


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


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


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.

27


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


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

http://www.marketwatch.com/story/class-of-2015-has-the-most-student-debt-in-us-history-2015-05-08

http://www.uschamberfoundation.org/millennial-generation-research-review

http://www.transamericacenter.org/docs/default-source/resources/center-research/tcrs2014_factsheet_millennials.pdf

http://www.pewsocialtrends.org/2010/02/24/millennials-confident-connected-open-to-change/

http://www.comscore.com/Insights/Press-Releases/2012/1/comScore-Releases-Report-Next-Generation-Strategies-for-Advertising-to-Millennials

http://www.thinkadvisor.com/2014/04/15/the-new-challenge-for-the-next-generation-of-finan?page=3


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

http://www.nielsen.com/us/en/insights/reports/2014/millennials-breaking-the-myths.html

https://www.whitehouse.gov/sites/default/files/docs/millennials_report.pdf

http://www.census.gov/housing/hvs/data/histtabs.html

http://www.census.gov/censusexplorer/censusexplorer-youngadults.html

http://www.tradingeconomics.com/united-states/youth-unemployment-rate

http://www.pewsocialtrends.org/2014/03/07/millennials-in-adulthood/sdt-next-america-03-07-2014-0-05/

http://www.ubs.com/content/dam/WealthManagementAmericas/documents/investor-watch-1Q2014-report.pdf

http://about.bankofamerica.com/assets/pdf/bmh-millennial-report.pdf

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