How to Motivate Young Workers to Save For Retirement

Whether you’re a parent or a boss, it’s in everyone’s interest to ensure younger generations are ready for life after work.

For most young workers, planning for retirement typically isn’t a priority. But as the nation’s fiscal outlook darkens, the likelihood that Congress will scale back Social Security benefits in the coming years only grows. Without early planning, most simply won’t be able to maintain the standard of living they expect in retirement. 

Whether you want to educate your young employees about planning for retirement or ensure a secure future for your child, here are four tips to help you reinforce the importance of retirement planning and inspire them to act.

Give Them 3 Irresistible Options 

Workers hired straight out of college often are unsure about retirement planning because they are unaware of their options. They don't know how to start or how much to save. If you help them know their investment options and find the approach that works best for them, they will surely consider the idea of contributing.

  1. A 401(k) Plan. The 401(k) plan is the most favored investment option for most workers because it needs little effort and the matching contribution from the employer—viewed as free money—is attractive. 
  2. A Roth IRA. While Roth IRA plans are not employer-sponsored, they make an excellent addition to a traditional 401(k) plan. The best part about investing in a Roth IRA is that the contributions are made on an after-tax basis. This means that all the withdrawals made during retirement after age 59½ are tax free. 
  3. Profit-sharing plans. This type of defined contribution plan isn’t an option for many, but where it’s available it enables employers to contribute cash or company stock to tax-deferred retirement accounts for employees. The plans are popular among the employees of young entrepreneurs and startup founders. They not only motivate team members to invest in employee stock options but also inspire them to actively contribute to company success.   

Educate Them on Maximizing Savings for a Richer Retirement

Many people mistakenly believe they will be able to survive on their Social Security benefits alone, so providing solid educational resources is important. Help young workers determine an appropriate time to retire and the amount of money they will need if they want to retire with sufficient resources to live the life they want. 

Developing a practical budget that accounts for inflation is critical in retirement planning. When employees know what it will take to safeguard their future, they will be more inclined to proactively participate.   

Inspire them to Invest by Integrating ESG Strategies  

Seven in 10 millennials have expressed that they are deeply concerned about the environmental, social and ethical impacts of the businesses they are investing in. For this reason, environment, social and governance (ESG) strategies can be highly effective at motivating workers who want their investments to reflect their personal values. ESG strategies provide a better way to align retirement planning investments with core beliefs and long-term financial goals, making workers more likely to save than spend.     

Show Them the Bigger Picture  

Several research studies have shown that people are much more likely to save for their retirement when they feel connected to their older self. Here’s where age-morphing technology can help. This innovative and effective app is designed to show you what you may look like when you retire, and who wouldn’t want to help out their future self? 

To emphasize the concept of retirement planning, the app also shows the estimated future prices of some durable goods, such as home appliances and automobiles. 

Another technology that connects well with tech-savvy young people are the various "will you have enough money to retire" calculator tools available. They vividly show how small adjustments in savings early on can have a big impact over time.    

Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, based in Goodyear, Arizona. He has over three decades of experience working with investments and retirement planning. Email him at