Americans, particularly Generation X, are becoming a bit nervous about their prospective retirement. In a study conducted by LIMRA, 36 percent of Gen X consumers are worried that they will not have enough money come retirement time. To put that into perspective, the study also showed that only a quarter of Gen Y (aged 18 to 32) are anxious and 30 percent of Baby Boomers (aged 49 to 68) had fears.
Defining the word "comfortable" is different for everyone, but the study asked for some specifics. The survey took a poll of that definition, and the top three descriptions came out to be "living comfortably" (24 percent), "having financial freedom" (23 percent) and "peace of mind" (16 percent). Each generation has their fears for many different reasons.
"While many Gen X Americans are in the prime earning years, they are less likely to have a defined benefit plan than Boomers and more likely to be aware of risks associated with retirement and the challenges they face to save enough to achieve a secure retirement than younger consumers," Alison Salka, corporate vice president and director of LIMRA Retirement Research said in the study. "They also may be managing multiple financial demands like saving for a child's education or helping older parents. Meanwhile, Baby Boomers probably already have a realistic picture on their retirement outlook."
This study highlights a common theme of anxiety when it comes to retirement. It is important for life insurance agents to proceed with caution when talking about this subject with clients. Although 20 percent of Americans are confident they will have a safe retirement future, the agitation is across the board in various demographics.
"In our most recent study, 6 in 10 women felt they had little or no knowledge of financial products and investments compared with 4 in 10 men," Salka said, "Interestingly, though, women and men had similar average scores on a financial literacy quiz LIMRA offered earlier this year. Research has shown that women control or play an important role in most household's financial decisions, in addition many will likely live longer in retirement, yet they still don't believe they have the knowledge they need."
Educating clients is an integral part of the life insurance business. You never know if a client is prepared with the necessary information beforehand. This study shows that a client's future is something they are nervous about, but it is important to ready them for their future.
"Retirement readiness is in the news these days but without the knowledge or guidance to help them make appropriate choices, consumers are likely to fall short of their financial goals," said Salka. "The industry can take advantage of this appetite for knowledge by implementing financial literacy programs to help consumers learn how to budget, get out of debt, save and plan for retirement. This will benefit not only the industry but the nation as a whole."
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Retirement fears are growing among many generations
