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The Honolulu Advertiser
Posted on: Monday, April 19, 2004

Younger workers less smitten by 401(k) accounts

By Justin Bachman
Associated Press

Many people praise 401(k) accounts as an ingenious device for aiding comfortable retirements, a pain-free financial virtue and a plus about many jobs.

But the youngest folks coming into the career force don't seem to agree.

In a survey of 1,000 workers, split evenly between the oldest (baby boomers) and the youngest (dubbed millennials), a third of the workers born in 1979 and after said they did not participate in their employer's 401(k) program. That was more than twice as many boomers (16 percent) who didn't.

The survey also found that millennials were 19 percent more likely than boomers to label the 401(k) "the benefit of yesterday."

Financial priorities seem to play the biggest role in this divergent viewpoint. More than half of millennials said their top financial concern was "paying everyday expenses" or "saving for a new house and car."

But boomers' top concern was retirement saving and paying for their kids' educations. Only 15 percent of boomers said "paying everyday expenses" was their main priority.

Even for 401(k) participants, the reasoning was different. Boomers said they contribute for "a sense of control over their finances," while millennials said they participate for a sense of accomplishment.

The survey was conducted in October by CIGNA Retirement & Investment Services, a division of CIGNA.