According to a recent report by the Investment Company Institute (ICI), the millennial generation is showing an increasing reliance on employer-backed mutual funds for their retirement savings.
The report said the median age that millennials first purchased a mutual fund was 23, compared to 27 for Generation X and mid-30’s for baby boomers.
With the use of ICI’s annual survey, the organization found that among mutual fund-owning households, more millennial households held their mutual funds through employer-sponsored retirement plans compared to their baby boomer counterparts.
“Our 2016 household survey shows that savers across all generations continue to rely on mutual funds to meet their financial goals,” Sarah Holden, senior director for retirement and investor research at ICI, said. “Among the millions of households headed by millennials, for example, more than one-third owned mutual funds and they have been buying mutual funds at a younger age than preceding generations. Millennials typically are engaged in mutual fund investing through their employers’ retirement plans, a popular entry point for mutual fund ownership.”
Other key findings in the report include more than 44 percent of U.S. households owned shares of U.S.-registered investment companies, three times as many U.S. households owned mutual funds through tax-deferred accounts compared to mutual funds outside such accounts and the majority of U.S. mutual fund shareholders had moderate or lower household incomes in their peak earning and savings years.