Why Millennials Need To Be More Intentional With Retirement Planning

This week, Maggie is chatting with MetLife's Roberta Rafaloff. In this episode, they chat about how millennials are on track to be the generation most likely to postpone retirement. If you’re worried about your own retirement planning, this episode is for you.

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Roberta Rafaloff is vice president, Institutional Income Annuities for MetLife. Institutional Income Annuities (IIA) enables defined contribution plan sponsors to provide guaranteed retirement income to their plan participants to help them achieve successful retirement outcomes. The business also offers specialty annuity products including charitable gift annuity reinsurance and lottery annuities. The division is part of Retirement & Income Solutions, the company’s institutional retirement business, which historically has been responsible for over 20 percent of MetLife’s operating earnings.

As head of the IIA division, Rafaloff, who joined MetLife in 1988, has overall profit center and management responsibility, including product oversight and development, underwriting and pricing, and client management. The division is well-known for its leading market position, innovation and history of firsts, such as being the first to introduce longevity insurance, including an institutional qualifying longevity annuity contract (QLAC), into the marketplace.

Prior to assuming her current role in 2003, Rafaloff, who has spent her entire career at MetLife, held a variety of sales, client service and management positions in MetLife’s U.S. retirement businesses.

Rafaloff earned a Bachelor of Arts in English and Sociology from Kenyon College in Gambler, Ohio. She is a FINRA Series 6 and 63 registered representative.

To learn more about Maggie and her coaching and speaking services, visit www.maggiegermano.com.

The theme music is called Escaping Light by Aaron Sprinkle. The podcast artwork design is by Maggie’s dear husband, Dan Rader.


Maggie Germano 0:05
Hi, and thanks for listening to the money circle podcast. I’m your host, Maggie Germano, and I’m a feminist and a financial writer, speaker, educator and coach for women. I’m passionate about making personal finance less scary and more approachable so that women can improve their relationship with money and take control of their finances. Every other week, I will interview an amazing, inspiring woman to talk about the issues that impact our money, our health, our independence, and more. We will touch on the societal and structural issues that we need to work together to change and the actions that we each have the power to take in our own lives. If you’d like to learn more about me and the work that I do, visit my website at Maggiegermano.com or follow me on Instagram @MaggieGermano. Thanks again for listening and I hope you enjoy. Hey there, and thanks for listening. I’m your host Maggie Germano. And this week, I’m chatting with Roberta Rafaloff, Vice President of Institutional income annuities at MetLife. In this episode, we talk about how millennials are on track to be the generation and most likely to postpone retirement. If you’re worried about your own retirement planning, this episode is for you. Enjoy.

Maggie Germano 1:27
Okay, welcome, Roberta. Thanks so much for being here today.

Roberta Rafaloff 1:31
Thanks so much for having me.

Maggie Germano 1:32
Of course. So let’s just kick it off by having you introduce yourself, tell us who you are and what you do.

Roberta Rafaloff 1:39
Great. So I am responsible for the institutional income annuity business at MetLife. And what we do is we provide guaranteed income solutions for people who participate in their employer’s defined contribution plan. And a defined contribution plan is a 401 K plan or a 403? B plan for seven plans. Plans like that. And yeah, so that’s what we do here. That’s what I do at Metlife.

Maggie Germano 2:06
That’s great. And how did you kind of find yourself in the world of, you know, benefits and like finance in general.

Roberta Rafaloff 2:16
So I have pretty much always been in the institutional retirement area at MetLife. And, you know, really many years ago, we recognize the fact that Americans are aging. In fact, we used to say, you know, the baby boomers are coming, they’re coming to retirement. And of course, they are already in retirement now. But many people today no longer have access to pension plans, the the defined benefit plans. So how can we as an insurance industry, you know, help provide solutions that can really help with what we saw as this impending retirement crisis, providing retirement income in to people in retirement. So that’s how I started in this field. And honestly, I really found it rewarding. Kind of sounds a cliche, but it really is rewarding to help people live that financially sound retirement.

Maggie Germano 3:11
Yeah, no, I totally get that. And I mean, we I feel like we hear a lot about how it is kind of up to the individual to figure out how to survive through retirement or, you know, delay retirement or whatever, it’s going to be like it. There’s a lot of fear out there, I think. And so I’m glad that there are people out there like you who are thinking about this and giving people the resources that they need to kind of figure that out. Yeah, so MetLife recently released a study about kind of retirement and how millennials are really going to be or at least thinking that they’re going to have to delay retirement and that sort of thing. But overall, what did you kind of find as some of the results from this study that really stood out to you?

Roberta Rafaloff 4:02
So our study is the 19th annual us Employee Benefit trends study. And what that found is that as working Americans focus on how to get by financially in the short term, and sort of short term amid the economic uncertainty of the past couple of years, many people have had to put their retirement savings goals on hold. And what we found is that a majority majority of working Americans say that they haven’t even started saving for retirement, or they’re behind where they think they should be with regards to their retirement savings. And this is true across demographics. But what we found is that millennials have been particularly hard hit when it comes to their financial health. So what do I mean by that? You know, we found that only three in 10 Millennials say that they’re on track for me to their retirement savings goals, and 29%. And this is a critical statistic to me anyway, 29% say they haven’t even started saving for retirement yet. Those real like I just said they’re significant and the real troubling numbers. Interestingly enough, we also found to have two related consequences. The first being that millennials are the most likely group to say they expect to postpone their retirement due to their financial situation. And to, they’re significantly less likely to say they’re on track for reaching their retirement savings goals. So you know, the millennials really have been hit hard by this as it relates to the retirement goals.

Maggie Germano 5:43
Yeah, absolutely. I mean, those are not like shocking numbers to me just based on how I hear people kind of talk about retirement and saving in general. But what do you think some of the things are, that are really causing this concern and delay potentially for millennials.

Roberta Rafaloff 6:03
So if you think about it, you know, the fact that millennials are behind on their retirement savings, it does make sense on top of the impacts that we’re seeing today, you know, the pandemic that we’re living through, will continue to live through. Millennials have also lived through a major financial crisis. And many are still saddled with student loan debt. We’re seeing that more and more. So the short term financial struggles mean that millennials haven’t been able to prioritize their longer term goals like saving for retirement. And in fact, this research that we did found that many millennials are already dipping into their retirement funds. One, three, millennials have taken an early withdrawal from their 401k or similar type plan. And we know how detrimental that is, right? We hear time and time again, you need to continue to save and not touch that money, the power of long term deferral. So by taking money out early, it’s going to have a critical impact on your retirement savings. Millennials are also more likely to say that they have to dip into other savings if they’re lucky enough to have those, or to even take out a loan. And the loan that we’re hearing is to pay for really basic things like their monthly bills. So rent, utilities, medical bills, student loan payments, again, that student loan payment comes back time and time again. So it really follows that millennials are the most likely group to say that they’re really concerned about being able to pay down these debts, credit card debts, mortgages, but they’re also concerned about saving for a big expense, will they even be able to buy a home? What happens if they need a new car? How are they going to pay things for things like their children’s college? These are really big, important expenses that they’re concerned about.

Roberta Rafaloff 8:10
Right? So it really expands beyond just the retirement conversation. So you know, obviously, a lot of people think like, oh, retirements, you know, 30 years down the road, I don’t have to worry about it. So there’s obviously that worry, you know, down the road, but also the more immediate worries of like, not being able to pay your bills, not being able to take those big milestones to write day to day living expenses, and the big milestones, critically important to them.

Maggie Germano 8:37
Yeah, absolutely. I mean, I understand that I’m a millennial, myself, and I think I’ve been pretty lucky. Like I’ve I do own a house, I Well, I did get married, you know, those sorts of things. But I know that a lot of people around me and a lot of the clients that I’ve had they really struggle with, you know, like you said that student loan burden as well as, you know, not necessarily being able to find a good paying job right away and how that kind of snowballs over time of what you’re able to kind of save or pay off. Yeah, exactly. And do you? Do you feel or I guess my question is, like, back to the retirement piece for millennials, like not even beginning to save for retirement or not feeling like they’ve saved for enough for retirement, or even, you know, the idea that they’re gonna have to postpone retirement, what do you kind of see as some of the impacts of that like, not just on the individual but like societally?

Roberta Rafaloff 9:36
You know, it’s an interesting question, because, you know, as I mentioned before, the majority of people today don’t have access to a defined benefit plan. So that sort of guaranteed income that’s going to come from their employer when once they retire. So today, the majority of people save for retirement in their employer sponsored plan, therefore, okay, plan their defined defined contribution plan. And unless you appoint people are doing that early, and starting to save, you know, you can’t help people who haven’t saved for retirement. And so I think what we say time and time again, is people need to focus and think about retirement and start saving as early as they can to make sure that they do have money in retirement. Otherwise, it’s going to be a huge impact on society, on our governments, when people get to that point that they’re ready to retire, and they just don’t have the savings that they need.

Maggie Germano 10:38
Right? Because I think we the I feel like when we talk about retirement, it’s like choosing when to retire. And oh, you know, my father in law, he doesn’t want to retire till the 70. But like my dad, he’s 62. He wants to retire immediately. But sometimes it’s not a choice, right? Like, sometimes there’s illness or injury that requires you to retire, retire. So when there’s not money to fall back on, that’s going to be a really big problem in that scenario.

Roberta Rafaloff 11:05
It’s going to, it’s going to be a big issue. And we just see that right, people are retiring earlier than they expected for it for a host of reasons. And can they actually afford to do that?

Maggie Germano 11:16
Right. And that’s scary to think about too, because like you said, it could end up being not only obviously a huge burden on the individual and their families and loved ones. But when someone needs support, and they don’t have the cash themselves, there there is that societal and governmental safety net that kind of needs to fall into place to support people to so it can it’s, it’s expensive. Yeah, it is. So what do you I mean, obviously, this conversation is probably and the results of your studies, probably scary to a lot of people who are listening. But so what do you recommend, like as an individual person who maybe hasn’t started saving for retirement yet? Or does feel kind of behind? What do you recommend, as some steps they can start taking to kind of take more control over this?

Roberta Rafaloff 12:08
So I think that it really does start with your with your workplace retirement plan, as we’ve been talking about this whole conversation. And I would say that, that millennials in particular, should really feel empowered to to ask their employers about retirement solutions that really can help them feel more secure. So just just think about this for a minute, you know, millennials are the most likely group to say that they are looking towards their employer for more help in in achieving and achieving financial security, through all the benefits that they’re that their employers offer to that. And Millennials are the new workforce majority, right? They’re, they’re the new baby boomers of yesterday, they are the ones who are who are comprising the workforce today. And it’s more critical than ever, that they feel educated in the different retirement solutions that are available to them through their employer. And they really need to feel confident in the decisions that they’re making around their retirement plans. Retirement is a is a big future. And if they’re not confident in their decisions and their ability to make those decisions, there could be, you know, negative impacts to them going forward.

Maggie Germano 13:30
Right, that makes a lot of sense. And so I know that most people, especially millennials are looking towards their employer for that retirement piece. And those retirement plans. Do you have tips on for anyone who doesn’t have an employer sponsored plan, like what they should kind of think about doing?

Roberta Rafaloff 13:49
Well, you know, there are there are lots of ways to save for retirement, outside of your employer sponsored plan. Clearly, more and more employers do offer some type of savings program for people. And we would suggest that that’s the first place you should go. If your employer offers a retirement plan, please, please save there. If you don’t, or if you don’t have access to that you can still save for retirement through IRAs and similar type of of, of solutions, but really look to your employer for for the plan that they offer. That is likely the a really good place for you to start.

Maggie Germano 14:32
Yeah, and I agree with that, especially because, you know, not only is it like it’s there so you don’t have to do the research to find the platform to start investing through to open an account through its, you know, you can just plug into the account that’s being offered through your employer. Oftentimes there is that match amount the which is, you know, you’re potentially doubling your money through as part of your compensation, as well. is obviously, you know, you know, 401k is actually have a higher contribution limit than, say an IRA much, much higher. So I always recommend, like maxing that out before you worry about an IRA.

Roberta Rafaloff 15:13
Absolutely. And the employer matches is key, right? Why? Why do you want to sort of, you know, leave that money on the table? Right? That’s so absolutely look at your employer plans. And to your point, the employer has done all of the work so that you don’t have to set up this program, they’ve presumably looked at the right type of funds to offer to their participants. So what really is the the best way to go?

Maggie Germano 15:40
Agreed. And you also mentioned that obviously, folks need to be feeling confident and informed and educated related to the retirement side of things. So what can the employers do to not only encourage their employees to take advantage of these retirement accounts, but to also educate them more and help them feel more confident about the choices that they’re making and the money that they’re contributing?

Roberta Rafaloff 16:12
Yeah, so our findings really do touch on how employers can help their employees save more for retirement in the first place. And I would say sort of as an initial step, employers really should talk to their employees about all of the benefits that they offer. These workplace benefits are really important. And employers should communicate all of them and communicate them often, quite frankly, to their employees, and specifically about what solutions may make sense for an individual’s needs. So for example, income annuities really are a great option for any employee who has concerns about how long their retirement savings are going to last. And I think most employees think about that, how long am I going to live in retirement? Will my savings last at least as long as I do. And by providing millennials and anybody else, quite frankly, with a fixed guaranteed stream of income that lasts their entire life? You know, this, these offerings do provide peace of mind. People know that they won’t live outlive their retirement savings. And that’s critical, especially when you don’t know what’s coming. Right. You don’t know what the future holds for you. So this is a significant safety net for for individuals. And what’s interesting is what came out in our research is that income annuities are a benefit that millennials are already interested in. According to like I mentioned, the the study that we did, three quarters of millennials say that they’re either very interested or even extremely interested in their employer providing them with with ways to convert some of their their defined contribution plan, the foreign key k plan assets into a stream of income that at some point, you know, they can buy when they retire, and they will outlive them, they won’t run out of money.

Maggie Germano 18:09
Yeah, that’s really interesting. And I mean, I know, obviously, it comes out in your study, too, that people especially millennials are thinking about this or worrying about this. So the more information and access they can get through an employer, the better.

Roberta Rafaloff 18:25
Yeah, yeah. And you know, what employers do, like we talked about before, they do take the time to decide which offer which benefit offerings they want to give to their employees. So that takes time that takes resources from an employer. So they should spend at least an equal amount of time communicating all of those benefits to their employees so that they do understand what’s available, and how those those benefits can really help them in retirement.

Maggie Germano 18:55
Yeah, no, agreed. And do you have any thoughts on the best kinds of ways for them to be communicating that information because I feel like I’ve definitely talked to people in the past about, like, open enrollment and benefits in general. And I feel like one of the talking points is always like, we’re trying to get the information out there and people still seem to be confused and or, like, don’t seem to understand what their benefits are. So do you have any kind of thoughts on that?

Roberta Rafaloff 19:23
So I, you know, I guess I would just say that, you know, communicate often communicate frequently, and do it in a variety of ways, a variety of media. We’re all we’re all different. Some people like to learn by listening. Other people like to learn by reading or or touching things or talking to people. Still, I would say letting letting your employees know the value of your benefits through multiple ways is really going to help everyone. We know some some employers do open office hours so they’re ready HR department, they do sort of like quote unquote, tips to no benefit emails. A lot of companies now offer financial wellness programs and workshops. So I think it there’s a variety of ways to do it. And but I would say to an employer, however they do that, it really does make a big difference when it comes to how your employees feel about their money. And frankly, their workplace more broadly.

Maggie Germano 20:29
Yeah, no, I think that’s, that’s really good advice. Because like you said, everybody learns differently. Everybody prefers to take in information differently. So someone who wants to go into an office that in HR and ask questions in person, that might be a terrifying idea to someone else who wants to read it as a daily email tip. So I think you’re totally right, having many different options as form of information is definitely gonna be helpful. Yeah. So is there anything else that you haven’t touched on yet, either about the study or about retirement overall, that you want to make sure listeners know?

Roberta Rafaloff 21:06
You know, I think all I would say, and we’ve touched upon this before, but I just feel like it’s a really important public service message to get out there is that it’s really critically important to save for retirement and do it early. Even if it means it’s just a small amount to begin with, you know, you’re just out of school and starting your working career. Start the habit early, so that you can retire with confidence. You know, and I think you touched upon this before, when you first start working retirement seems like yeah, oh, gosh, Damn, that’s 40 years away. It’s a really long time. I could think about it later. But I would say don’t think about it, like, think about it when you’re young. So that those those assets do start to accumulate, and then you can decide at the point of retirement, how you’re going to turn those, those really well earned hard saved assets into retirement income that can last your lifetime.

Maggie Germano 22:05
Yeah, I think that’s a very important takeaway. Because, like, like we’ve both said, you can think that something so far away that it doesn’t matter. But then life flies by and you’re 10 years away from retirement, and you’re like, Oh, my God, I do not have enough money to retire. And so it’s better to start early and just know that it’s happening with compound interest and all that. So I’m with you. Absolutely. Great. So is there anything going on with MetLife that you’d want to make sure listeners know about that you’d like to promote?

Roberta Rafaloff 22:38
Well, I guess I would say, you know, please go to our go to our website metlife.com. And you can read the study and get more information about it. From from any perspective, I would say to employers who might be listening to this this conversation. Remember, retirement income is a critical component, defined contribution plans are great, but what happens post working post contributing to that defined contribution plan, you need to help your employees convert those assets into retirement income. So that’s really I think that the critical message gap?

Maggie Germano 23:17
Yeah, no, I agree with that. And I will make sure to link to that study and link to MetLife overall, so people have easy access. And I really appreciate you taking the time to chat today. This is a really important topic to me and to many other people. So I really appreciate it. Great.

Roberta Rafaloff 23:34
Thanks so much for having me, I appreciate it.

Maggie Germano 23:40
Of course.

Maggie Germano 23:40
Thanks again for listening to the money circle podcast. If you want to learn more about my financial coaching services, my speaking and workshop offerings, or just to read my blog visit Maggiegermano.com. To get in touch with me directly email me at [email protected] You can also follow me on Instagram and Twitter @MaggieGermano. I look forward to hearing from you. Bye bye.