Millennials, Generation X and Baby Boomers each have distinct strengths and weaknesses when it comes to managing and saving money, research from Financial Finesse shows.

While Millennial employees (younger than age 30) tend to have the lowest average financial wellness scores as a whole, they continue to slightly edge out Generation X in several areas of money management, Financial Finesse found. However, Millennials may have been the most impacted psychologically from the Great Recession. From the way they manage their money to the way they invest, the focus is more on not losing money than growing their wealth for the long term.

Gregory Ward, director of the Financial Finesse Think Tank in El Segundo, California, says they see evidence of this in calls to the firm’s live helpline. “When we look at the types of calls we get from Millennials and compare this to outside research, we get a sense that Millennials are very concerned about student loan debt, and they lack trust in the financial industry as a whole,” he tells PLANADVISER. “They are more concerned about immediate needs and debt, and they invest conservatively. They are focused on maintaining the money they have and doing the best with it, while other generations are more concerned with investing and making money grow.”

The research found Millennials’ most common vulnerability is not saving enough for retirement. The dwindling availability of traditional pension plans and potential cuts in government entitlement programs can make retirement preparedness even more challenging for Millennials than for older generations. However, they lag the older generations in contributing to their employers’ retirement plans (83%) and running a retirement calculation to see if they’re on track (27%).

Financial Finesse’s 2014 Generational Research report says part of the problem is that Millennials are the only generation not to have retirement planning as their top priority. Instead, it placed third (56%) behind managing cash flow (76%) and getting out of debt (59%).

Ward says automatic enrollment and defaulting Millennials into target-date funds (TDFs) is a good thing. Millennials feel too conservative though they have many years to save and invest. “The idea of being too aggressive doesn’t settle with them, but when talking about something as far away as retirement, it makes sense to have more aggressive investments,” he says. However, if Millennials don’t have the mindset that their investments are for the long-term future, there’s a danger they will panic with the next market correction.

According to Ward, plan sponsors should recognize that Millennials grew up in a technology-rich environment, so incorporating gamification into financial education will probably result in more uptake and an enhanced learning environment. And, since Millennials like to talk to each other and get opinions, social media should be used in education.

As for Generation X (ages 30 to 54), competing financial priorities make them the most financially at-risk group. As Generation X is more likely to own a home (69% vs. 23% of Millennials), and they are the generation most likely to have minor children of their own to take care of (57% vs. 26% of Millennials), not having enough emergency savings is a top vulnerability.

The research found only 17% of Generation X are on track to reach income replacement goals in retirement, yet 23% are putting money into 529 college savings plans. Ward says parents should prioritize and recognize that, based on their financial resources, they may have to sacrifice some children’s activities.

He notes that Generation X is a very independent generation; they grew up in a time without “helicopter” moms. They don’t necessarily want to be told what to do, but they want to be able to get what they need when they need it. Plan sponsors should offer do-it-yourself tools, such as advice services they may sign up for if they want, assessment tools or online education.

Financial Finesse found only about three in 10 Baby Boomers feel confident they are prepared for retirement. Only about half reported they have run calculators to assess their preparedness.

Ward says Baby Boomers who call the Financial Finesse helpline often ask if they have enough money to last the rest of their life. They have a perpetual feeling of inadequacy about their retirement savings, but that doesn’t mean they aren’t prepared. It may mean they haven’t used resources to assess their readiness or talked to an adviser.

Baby Boomers are also unsure of decumulation strategies for their retirement savings and when to take Social Security, and their plans for retirement may not prepare them for a major event. The research found Baby Boomers are, overall, the most financially secure, but they face an impending health care crisis due to longevity and inadequate insurance planning. Only 16% of Baby Boomers reported having long-term care insurance, despite estimates from The U.S. Department of Health and Human Services that 70% will require some level of long-term care in retirement.

Ward says plan sponsors can provide financial education for Baby Boomers’ transition from working years to retirement. It should include discussions about distribution strategies, Social Security and estate planning. He adds that annuities have gotten a bad rap, but it appeals to Baby Boomers to take savings and convert it to a monthly income for life—to not have their savings exposed to potential volatility. “Plan sponsors should consider offering annuities within their retirement plans. That is usually a better-priced option than if employees went to the market on their own, and it will enhance the likelihood that retirees will enjoy a comfortable retirement,” Ward says.

According to Ward, employers and the retirement industry are starting to align with the need for holistic financial wellness education for all generations. It can change employee retirement savings behaviors, result in less absenteeism and less wage garnishment due to financial issues, and decrease the number of retirement plan loans taken.

Financial Finesse expects to see double digit growth in plan sponsors offering holistic financial wellness in the next few years.

The research report may be accessed here.