As the economy continues to recover from the Great Recession, it seems that no generation made it through without various financial woes. But there are trends that have become apparent which have since been tracked and studied by LIMRA.
The financial services research industry leader recently conducted an online survey that asked more than 6,000 consumers between the ages of 25 and 64 who had household incomes between $25,000 and $149,000 about their financial wellbeing.
Among them were members of Generation X – those born between 1965 and 1980. For the purposes of the study, Gen Xers were further broken into older Gen X – those born between 1965 and 1972 – and younger Gen X, who were born between 1973 and 1980. The former made up about 15% of those surveyed, while the latter formed about 14%.
How Generation X recovered from the recession
It seems that the gap between older and younger Gen Xers is not insignificant, especially when looking at how various households have recovered financially since 2009. According to the study, just 38% of older Gen Xers feel that their household income is somewhat or much higher than it was five years ago.
On the other hand, more than half – 52% – of younger members of Generation X said the same thing. A third of older Gen X members said their household income has remained steady for the last half-decade and about a quarter of younger members said the same.
Finally, 29% of older members of Generation X has seen their household income become somewhat or much lower, while 22% of younger members said the same.
How should financial professionals approach Gen X?
For most Gen Xers, retirement is a top priority. According to the survey, nearly three-quarters of both younger and older members of Generation X cited retirement as their top priority. They are also setting aside money for an emergency fund, with 64% of younger and older Gen Xers rating it as an important financial goal. Slightly less important, but still a high priority, for many is saving for a child’s education – 42% of younger and 40 percent of older Gen Xers thought it’s very or extremely important – and saving up for a large purchase like a vacation or a remodel was important to 37% of younger members of Generation X and 28% of older ones.
According to the report, financial professionals face unique goals when working with members of Generation X. Because they are attempting to reach several financial goals at once – like saving for retirement while attempting to fund their children’s education – they may need help to make sure they aren’t spreading their finances too thin.
Financial professionals are in a great position to help Gen Xers by providing them with the advice and support they need to distribute their money in the best possible manner and help them reach their goals, both short and long term.
Research from Stanford University found that “people increase their savings when they use retirement income projections and have access to detailed information about the benefits of saving now rather than later. When such information is absent, people save less.”
What does that mean for financial professionals? Gen Xers are seeking retirement plans that are tailored to their needs and desires. Instead of giving plans that are one size fits all, financial experts can expect to work closely with their clients to individualize options.
Life insurance is also an important option that should not be passed up by Gen Xers – according to the report, about a quarter of them don’t own any life insurance policies at all.