ST. LOUIS–(BUSINESS WIRE)–Generation X is starting to think more seriously about retirement and is
wondering if they will have enough money to carry themselves through
their golden years, according to financial services firm Scottrade,
Inc.’s 2016 American Investor Report. Sometimes considered the
middle child of the generations, Gen Xers are feeling the squeeze of
getting close to retirement age and starting to buckle down and get
serious about what their goals are.
Although investors in general are confident that they will have enough
money when they retire, Generation X is far less confident than other
generations that they will be able to make ends meet in retirement. Only
one in five Gen Xers (19 percent) are extremely confident, compared with
about one in three Baby Boomers (31 percent) and half of Millennials (48
percent) and Seniors (51 percent). The 2016 American Investor Report is
based on research conducted online among 1,001 U.S. investors.
Additionally, while retirement is the top financial priority for most
generations – including Generation X – Gen Xers feel the least prepared
for retirement. Three-quarters of Gen Xers (who are aged 35-49 years)
call retirement a financial priority, but 28 percent say it is the one
financial priority they are least prepared to meet (vs. 17 percent of
Millennials, 14 percent Boomers and 12 percent Seniors).
Perhaps because they are concerned about having enough money to retire,
more than half of Generation X (56 percent) plans to work in retirement
to supplement their income. Further, they are the most likely generation
to say they want to work part-time in retirement (32
percent versus 18 percent of Millennials, 23 percent of Baby Boomers and
13 percent of Seniors).
Gen X – Stuck in a Midlife Crisis
Retirement isn’t the only thing Gen Xers are concerned about; job
security and education expenses are also keeping them up at night. While
Baby Boomers were dubbed “The Sandwich Generation” because they found
themselves raising children and caring for aging parents at the same
time, Generation X appears to be “The Worried Generation,” as many were
hit hard by the financial crisis and have ongoing concerns about job
While all generations stress about the uncertainty over the economy, Gen
X also stresses about not having enough money to pay the bills (36
percent). Nearly half (44 percent) say a job loss would delay their
retirement plans – far more than any other generation. What’s more, Gen
Xers find themselves sandwiched between paying off their own student
loans and saving for their children’s education while trying to save for
“Generation X clearly has many serious concerns about financial
stability and saving for the future, whether it’s retirement, their
children’s education or achieving life-long dreams,” said Erik Merkau,
president of Scottrade Investment Management. “They are more worried
about job stability than any other generation. And if you think of their
mindset — coming of age watching their parents deal with intense
unemployment, this makes sense. They’re the first generation that has to
cope with paying off large student loans while saving for retirement and
their children’s education, which creates a great deal of stress and a
sense of uncertainty for Gen Xers.
“Regardless of your age or life stage, it’s so important to have a plan
in place when it comes to your investing strategy. Worry can be a great
motivator to review your portfolio and seek support,” adds Merkau.
“That’s where Scottrade comes in. We help clients navigate their
personal financial journeys whether clients know where they’re going or
need guidance to get there.”
Millennials – Changing the Way We’ve Thought of the Typical Investor
Looking to younger investors, a different story shakes out among
Millennials (who are aged 18-34 years). Perhaps because they have grown
up in a 401(k) world where workers are taking control of their own
retirement investments — or perhaps because they are aware of the
uncertain future of Social Security — Millennials appear to be making
smart choices to secure their financial future. The large majority of
Millennials (82 percent) deposit money toward their investment goals on
a regular, scheduled basis throughout the year — far more consistently
than their older counterparts.
Saving for education and home ownership are competing priorities for
Millennials when it comes to retirement planning. For example, 60
percent of Millennials say a mortgage is a top financial priority. And,
nearly one in three Millennials (30 percent) say educational expenses
are the financial priority they feel least prepared to cover and would
most delay their retirement plans (34 percent).
Generally speaking, Millennials tend to invest for a variety of reasons.
The number one reason Millennials invest is to have an emergency/“rainy
day” fund (43 percent). When asked how long their current emergency fund
would last if they lost their job, most Millennials would be
ill-prepared. Two in three Millennials (65 percent) say they would make
it less than six months (compared with 34 percent of Gen Xers, 16
percent of Boomers and 7 percent of Seniors). They are also much more
likely than other generations to invest so they can afford a new home, a
new car or another large purchase.
Other Key Findings:
Retirement is the top financial priority for investors. More
than two-thirds of investors overall (69 percent) say saving for
retirement is a top priority and the large majority feels well
prepared for their golden years (84 percent). Four in ten Millennials
(42 percent) cite retirement as a financial priority, compared with
more than seven in ten of those 35 and older.
Healthcare costs #1 reason to push back retirement. When it
comes to retirement planning, healthcare tops a number of lists. In
fact, affording care offers a compelling dichotomy because most
investors emphasize its importance as a financial priority (54
percent), but at the same time believe it is one of the major areas
where they are least ready to absorb the financial drain (40 percent
are least prepared to cover long-term caregiving, 33 percent are least
prepared for healthcare expenses). An unplanned illness – and the need
to continue health benefits – is the #1 reason investors would
potentially push back their retirement plans.
Financial advisors – the most common source of information. Two-thirds
of those surveyed use a financial advisor (67 percent), and six in ten
of those discuss their portfolio with their advisor at least twice a
year. Retirement is the primary life event to seek professional
financial advice, whether it is during retirement (57 percent),
nearing retirement (41 percent) or just starting to save for
retirement (35 percent).
About the 2016 Scottrade® American Investor
The 2016 American Investor Report survey was conducted September 14-22,
2015, in collaboration with Harris Poll, an independent third-party
research firm not affiliated with Scottrade, Inc., its business units or
subsidiaries. The online survey was conducted among a nationally
representative sample of 1,001 adults, 18+ in the U.S. who are involved
in investment decisions for their household and have $2,500 or more in
investments with a full service brokerage company, online brokerage
company or independent financial advisor under management. This online
survey is not based on a probability sample, and therefore, no estimate
of theoretical sampling error can be calculated.
About Scottrade, Inc.
A leading investing services company founded in 1980, Scottrade’s
mission is to improve lives by helping people overcome barriers to
financial success. Through a large, nationwide branch network, Scottrade
partners with millions of clients, offering them the solutions and
support they need to take control of their long-term investing and
trading needs. To learn more about Scottrade, visit about.scottrade.com,
or talk to us via social
media. Member FINRA/SIPC.
Lizzie Curry, 314-965-1555 x. 1622