Boomer Retirement Advice to Kids: Don't Do What I Did

How to help young adults make workplace savings work for them.

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When it comes to parents giving advice, there are good reasons for skepticism. An International Journal of Psychology study released last month found that 84 percent of U.S. parents lie to children get them to do the right thing, especially when it comes to food and money. But experts say "white lies" will not help when it comes to advising grown children on managing savings. Szykman says her research has found that young adults don't know about money but won't accept tall tales. They are "the most media-savvy and skeptical generation ever and they are skilled at getting at the truth," she says.

Fortunately for boomer parents, step one—saving money—has already been taken care of in some cases. New U.S. regulations are pushing retirement plans toward setting up automatic enrollments. So the decision on whether save at least something will often have been made by employers.

"When it's an opt-out [automatic-enrollment plan], it is more like a benefit, and they are more likely to stick with it," Szykman says. "Young people are already so overloaded with information, it's just one more overload if they have to think about getting out, and that means they are more likely to stay put for a while."

[See: 10 Books Investors Should Read.]

Census Bureau statistics show that the percentage of under-35 participation in savings plans is already twice the level of the 1990s, and experts expect it to be higher still with the new auto-enrollment of workplace savings. Experts expect auto-enrollment to boost savings even as young people faces huge challenges in paying back $1 trillion in college debt and finding solid footing in a difficult workplace.

One piece of smart advice parents can offer. Another change in retirement plans is that many more are starting to offer Roth-style workplace savings plans. For young people, the Roths are almost a "no-brainer," financial experts say, and parents can offer it as a smart idea that can help maximize early saving. Roths allow savings to grow tax-free and are not taxed at withdrawal time. Traditional savings plans allow tax-free contributions but savings are taxed as normal income at withdrawal.

"This is especially good for young people in lower tax brackets who don't need the deduction as much right now," says Lockwood. "They can really capture the full benefit of long-term savings plans."

[Read: Should You Switch to a Roth 401(k)?]

And with the first step completed by auto-enrollment, parents can step back from dispensing stern warnings about the life of ruin that non-savers face.

"People are afraid already," says Webb, facing, as they are, a difficult economy and a tough workplace. "The trouble is that fear is not a call to action. Fear is a justification for hunkering down and doing nothing."

With high-achieving millennials, Lockwood suggests another subtle tactic to help to jar the competitive instinct that already got kids through college, or put them into the workforce, which is no small feat. "You can let them know the reality," says Lockwood. "If you don't start early putting saving funds into your spending priorities, you are going to have a hard time later catching up to everyone else."