Gen X – “The Worried Generation”: Scottrade Research Reveals Gen X More Concerned About Retirement, Education and Job Security than Other Generations

ST. LOUIS--()--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 stability.

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 retirement.

“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 Report

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, www.scottrade.com or talk to us via social media. Member FINRA/SIPC.

Contacts

Scottrade, Inc.
Lizzie Curry, 314-965-1555 x. 1622
Public Relations Analyst
Lcurry@scottrade.com

Release Summary

Generation X is not confident they will have enough money saved for retirement according to the Scottrade American Investor Report.

Contacts

Scottrade, Inc.
Lizzie Curry, 314-965-1555 x. 1622
Public Relations Analyst
Lcurry@scottrade.com