It’s more than a lack of direction that is hurting Americans born between 1965 and 1992, according to a study by Security Benefit. A significant percentage believe saving for retirement is becoming more difficult, with two-thirds (65%) saying it’s harder for their generation to save for retirement than it was for previous generations. Additionally, half (48%) of respondents believe they are behind on saving for retirement while just 43% said they were satisfied with their current financial situation.
The survey found that Generations X and Y place a premium on securing their financial futures. Nearly three-quarters (73%) said that a guaranteed stream of income in retirement is an important reason to purchase a financial product, while more than half (55%) said that it’s important for a financial product to protect their assets from losses in the stock market.
Generations X and Y are still putting money aside for retirement despite the lack of clear goals and the perception of generation-specific hurdles. A majority of respondents (90%) said saving for retirement is an important goal, and 88% said it’s important to maintain their desired lifestyles in retirement.
Surprisingly, these two generations that were instrumental in the growth of the Internet do not view online solutions or resources as the best option for retirement planning. Only 12% of respondents would prefer to save for retirement though a company or service they found online, while just 18% of respondents would go online for advice about how to save more.
“It’s somewhat of a surprise that these generations, especially Generation Y, would prefer to use offline resources to guide their savings decisions,” says Al Dal Porto, vice president of market research with Security Benefit. “It’s clear that Generations X and Y prefer to use more traditional means of financial planning by working through employer-provided retirement services or consulting with a professional financial adviser.”
Thumbs Down to Web Help
Instead of turning to the Web for help, Generations X and Y expressed a high preference to seek information through more traditional avenues. The survey found only 18% said an Internet search engine like Google or online reviews is a major source for financial information or advice. In comparison, 39% said a financial adviser or planner is a major source of financial information or advice, and 27% see their parents as a resource.
The younger generations are actively working to fund their dream retirements through a variety of retirement savings vehicles:
- 71% have used a 401(k), 403(b) or a 457 plan at work to save for retirement;
- 41% turned to a checking, savings or money market account expressly earmarked for retirement; and
- 39% have saved through an individual retirement account (IRA).
“It’s great to see Generations X and Y actively considering their retirement savings needs, but it’s difficult to plan for and ultimately achieve a successful retirement without having an end-goal in mind,” Dal Porto says. “While accumulating retirement savings is critical at this point in the lives of Generations X and Y, it’s encouraging to see that a significant portion of these individuals looking toward their inevitable retirement income needs.”
The 2014 Gen XY Financial Maturity Study was conducted by Greenwald & Associates between April 8 and April 21 on behalf of Security Benefit, among other financial services firms. A total of 2,122 individuals age 18 to 48 completed the survey online. Security Benefit previously released results of the study specific to K-12 educators.
More about Security Benefit is on its website.