Gen X in Need of Financial Wellness Attention

Providing access to one-on-one financial planners who can create a customized plan for employees can help employees gain confidence in their financial well-being.

While Millennials and Baby Boomers get much attention, it could be argued that Generation X is the most in need of financial wellness help.

For Gen Xers, according to Larisa Terkeltaub, senior director of LearnVest at Work, aside from credit card and student loan debt and saving for emergencies and retirement, there’s an additional layer when it comes to prioritizing competing goals. Many parents tend to put their family’s needs, such as paying for their children’s college, ahead of saving for their own retirement and accelerating their debt repayment. Parents strive to provide their families with everything they need, which at times can come at the cost of their own savings plan.

Monika Hubbard, AIF, institutional retirement consultant at Unified Trust Company, who is based in Louisville, Kentucky, says, “Millennials get all the press, probably because they are the digital generation, which is unique to them,” she says. “In addition, the wealth transfer from Baby Boomers will be mostly to Millennials—about $30 trillion—and interest follows money.”

According to Hubbard, Gen X’s top worry (56%) is not having money for short term financial needs. The second worry for Gen X is not having enough for retirement. Also, cash management and debt management are worries (45%).

Terkeltaub says in many cases, Gen Xers are more likely to be able to focus on goals above and beyond their basic financial security. Gen Xers who have established strong financial footing are better able to dream up what their next financial achievement may be.

Hubbard says Unified Trust Company is seeing Gen X turn to topics correlated to their stress; debt management seems to be a first priority. Gen X is asking, “How do I manage money—reduce credit card debt and improve my credit score while managing day to day expenses?” she says.

“We always tell them to save early and save more, but if the average debt for student loans is $10,000 to $15,000, and they have to pay for living expenses, they think, ‘How can I save enough to get the company match when I don’t have money for current expenses?’” Hubbard says. She adds that Generation X also worries more about breaks in service or change in jobs, unlike the Baby Boomer generation. They have to make sure they can deal with something that happens in the short term.

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“We’ve found that if you spread resources across too many buckets, it can feel like you’re not making progress on anything. So, a big part of this process is to strike the right balance between working toward the goals that feel most pressing and building a solid financial foundation,” Terkeltaub says.

Terkeltaub notes that employers seem to recognize that a financially healthy workforce can have a positive impact on their bottom line. She cites Aon Hewitt research that found more than 60% of human resource professionals say financial stress is having an impact on employee work performance, and Consumer Financial Protection Bureau data that shows 55% of employers believe financial wellness leads to greater productivity.

Hubbard says any retirement plan sponsor has to recognize that each generation has unique needs. They should understand generational concerns, but also individual concerns. “Younger Gen Xers have children; older Gen Xers have children going to college, and sometimes they are also facing taking care of their parents,” she notes.

Providing access to one-on-one financial planners who can create a customized plan for employees can help employees gain confidence in their financial well-being, Terkeltaub suggests. And, a dedicated financial planner can help employees take advantage of benefits already being offered by their employer.

Hubbard suggests plan sponsors should look at different wellness programs available in the marketplace. “Do look to outside vendor support, because when you start talking about very personal things, employees don’t want to talk to someone in company, and employees need to feel they can trust and share personal information,” she says.

She notes that unfortunately a lot of small businesses don’t have the resources to go to bid for outside organizations. For those that don’t have the resources, and even for additional support for those plan sponsors that do, they need to ensure their retirement plan provider is engaged at the participant level, according to Hubbard. Providers can offer tools and thought leadership to help employees reach retirement success; tools not just about retirement savings, but addressing challenges to get to retirement success.

“When employees understand the basics of financial planning and how to improve their finances from the core level, they can work to establish a solid foundation from which to continuously build upon,” Terkeltaub says.