Generation X is the forgotten generation when it comes to retirement planning, a study revealed.
A higher percentage of Gen Xers are looking more like millennials than baby boomers as far as their retirement confidence is concerned, according to a study by the Employee Benefit Research Institute. This is troublesome as the oldest members of Gen X are getting very close to retirement age.
High levels of debt are keeping Gen Xers from saving for retirement, and the Great Recession hit this age group particularly hard, said Neil Lloyd, partner and head of U.S. defined contribution research with Mercer.
Gen Xers show less confidence than baby boomers or millennials in their ability to live comfortably in retirement, have sufficient retirement income, and not outlive their retirement savings.
Among the three generations studied, 65% of Gen Xers have saved for retirement, compared with 78% of baby boomers and 57% of millennials. In addition, only 31% of Gen Xers have figured out how much they need to save for will retirement, compared with 4% of baby boomers and 33% of millennials.
EBRI’s 29th annual Retirement Confidence Survey also showed that about one in four workers are obtaining their retirement advice from the workplace, through their employers’ retirement savings plan.
About 90% of workers who have access to a retirement savings plan through their employer are contributing to it, the survey said. Most who are offered a retirement savings plan at work signed up for it on their own, but about three in 10 said they were enrolled automatically.
Split On Pro Advice
Three in 10 workers said they are getting advice from a financial professional, and 38% of retirees said they also are receiving professional financial advice. But nearly the same percentage of retirees – 34% - said they handled their retirement planning on their own.
Although two out of three workers said they felt confident in selecting retirement products on their own, a majority of workers said they would find it helpful if retirement savings advice were provided in the workplace.
When selecting investment options in their retirement plan, workers said performance growth was the main factor in making their selections, followed by options that matched their risk tolerance.
Workers may not be seeking professional retirement advice now, but that could change as they retire, the research showed. Twenty-eight percent of employees said they are working with a financial professional, but 33% said they they plan to do so in the future as they transition from employment to retirement.
The research showed that workers need help in figuring out what to do with their retirement funds after they stop working. One in four said they don’t know what they will do with their money, and 36% said they don’t know how much money they will withdraw from their retirement funds each year.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.
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