Gen Xers experienced the fall of communism in Europe, the hip hop revolution and Y2K. Will they cap it off with a satisfying retirement?
Gen Xers themselves are dubious. Only 24 percent of them are “highly confident” they will have enough money to support themselves through retirement, according to a new study from the Insured Retirement Institute.
The Gen X generation refers to those born from the early 1960s to the early 1980s. The IRI study concludes that the lack of confidence may be warranted given that more than a third of Gen Xers have nothing saved for retirement.
“Pop culture may remember Gen Xers as the children of the ‘80s seeking independence, yet it may be their quest for financial independence in retirement that becomes their lasting legacy,” IRI President and CEO Cathy Weatherford said.
Only 8 percent of Gen Xers have enough saved to support themselves in retirement, the study said. Even among the oldest Gen Xers, those aged 44 to 53, only 11 percent have sufficient savings.
To determine if a Gen Xer has sufficient savings, IRI considered the amount needed for an individual to purchase a deferred income annuity that would generate enough annual retirement income to bridge the gap between the average Social Security benefit and average expenditures for a retiree.
“Gen Xers, while still lagging in overall savings, have time on their side,” Weatherford said. “To ensure they can achieve a secure retirement, Gen Xers will have to exercise diligence in the years ahead by committing to increasing savings and contributing to their retirement plans.”
Other key findings from the report include:
- Half of Gen Xers believe saving for retirement is their top financial concern.
- Nearly six in 10 Gen Xers, 58 percent, have not tried to determine how much they need to save for retirement. Among those who have, 34 percent did not factor in health care costs in retirement.
- Nearly six in 10 Gen Xers, 58 percent, believe they will retire at age 65 or later. This includes 24 percent who plan to keep working until at least age 70.
- Nearly two-thirds of Gen Xers, 65 percent, say they would return to the workforce if they ran out of savings in retirement, and six in 10 say they would attempt to scale back and live only on Social Security.
- Only one in five Gen Xers work with a financial professional. But Gen Xers who do are twice as likely to have at least $100,000 saved for retirement, compared to those who plan on their own.
- About eight in 10 Gen Xers describe themselves as being somewhat or not very knowledgeable about investing, and two-thirds rate their financial IQ as being average or low.
- Two-thirds of Gen Xers believe it is very important to leave an inheritance to loved ones.
Produced on a biennial basis, this is the third study of Gen Xers by IRI. The study is based on a survey of 805 Americans aged 34 to 53 conducted from December 28 to 31, 2015. The margin of error is plus or minus 3.5 percent.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected].
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