Gen X and retirement: A case of cognitive dissonance?

Posted On April 17, 2014

The Insured Retirement Institute recently released a study, “The Retirement Readiness of Generation X” which outlines the financial security, or lack thereof, that Generation X expects in their retirement years.  The study reinforces how the Great Recession hit Gen X hard at a moment when their financial stories would typically have been on an upswing.  What I found most interesting about this piece, however, was that the survey results paint the picture of a very conflicted generation – one that believes one way, but whose actions are in complete contradiction of that belief. 

These three statistics in particular, presented in succession in the report, stood out:

  • The median amount saved for retirement by GenXers who work with a financial planner is $90,400, which is twice the amount saved by GenXers who do not work with a financial planner.

  • Fewer GenXers are working with financial planners than two years ago. Currently, 77% of GenXers say they are not consulting a financial planner to help them plan for their retirement, compared to 63% two years ago.

  • Only one-third (30%) of GenXers rate themselves as being highly knowledgeable on financial matters, and just one in nine GenXers (11%) stated that they have high levels of knowledge about investing.

Hello?  Xers? Are you listening to yourselves?  You admit to not being highly knowledgeable about financial matters or investing, yet you aren’t working with the individuals who have that knowledge. Yes statistics show that those working within professionals have twice as much saved for the retirement you are so worried about?  But before I judge too harshly (this is my own generation, after all) let’s remember that Gen X is fearful of “the establishment” and the investment world is definitely part of the establishment.  That said, financial advisors should view Gen X as a largely untapped market and work diligently to overcome their distrust – possibly through demonstrating how they may be missing out on a better financial return.

This is an excellent read, not only for financial advisors seeking to reach the Gen X investor, but for Xers themselves to understand where they are headed and perhaps uncover a touch of denial that, if confronted now, could save some pain in later years. 

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Blog, Financial Services, Generation X, Retirement