Retirement planning is not just something for Baby Boomers.
According to The Harvard Center, if you were born anytime from 1965 to 1984, then you are a card carrying member of "Generation X," or "Gen X" for short.
Did you know researchers at the Insured Retirement Institute (IRI) recently found a possible retirement knowledge gap when they conducted an online survey of 802 of your Gen X peers?
According to Think Advisor recent article titled “These 3 Threats Scare Gen Xers More Than Basic Retirement Costs: IRI,” the survey revealed some troubling news when it comes to Gen X retirement planning. To quote the survey analysists, “They’re (mostly) doing it wrong.”
So, what were some of the salient findings?
First, only 20% of Gen Xers have talked to a financial advisor.
Second, only one-third of Gen Xers have tried to figure out what they’d need to have saved to retire.
Drum roll, please.
And third, only 23% of the Gen Xers who have tried to save for retirement, have more than $250,000 in retirement savings.
While the survey did not segment most of the results by income or asset level, it did examine the use and failure to seek the counsel of a financial professional.
Participants with financial professionals appear to have a more comprehensive approach to their financial planning.
Of those working with a financial professional, some 82% of the Gen Xers responding confirmed discussing retirement planning and 61% said the advisors had discussed investing.
What did I find interesting?
Fully 87% of Gen Xers working with a financial advisor reported being confident about having enough income to cover their basic expenses in retirement, but only 58% of the entire group surveyed reported having such confidence.
Nevertheless, even the Gen Xers with advisors said they had grave doubts about their ability to handle other major financial challenges.
Here are some of the other findings of interest:
Covering long-term care (LTC) costs.
Only 63% of the Gen Xers with advisors reported being "somewhat" or "very confident" about having enough money to pay their long-term care expenses.
Apparently, advisors have yet to address their Gen Xer clients with that concern.
In addition, only 9% had talked about planning for cognitive decline, like dementia or Alzheimer’s.
What about long-term care insurance?
Only 29% had talked to their clients about it.
Addressing LTC needs of Baby Boomer parents.
A little over half of the Gen Xers with advisors reported being "somewhat" or "very confident" when it comes to assisting with the LTC bills of their parents.
The survey did not ask Gen X respondents whether they had talked about this aspect of long-term care planning with their advisors.
Paying college bills for children.
Many experts in the field suggest that Gen Xers should prioritize their retirement planning and leave the college bills of their children second.
However, Gen X parents say the funds for the college education of their children must come from somewhere.
Only 51% of the Gen Xers with advisors said they were "somewhat" or "very confident" they will have enough money to defray the higher education expenses facing their children.
The big takeaway from this survey is that, regardless whether you are a Baby Boomer, Gen Xer, or even a Millennial, it is essential to have the advice and counsel of an experienced financial advisor.
Establish this relationship as soon as you begin participating in the economy.
If you need assistance finding an appropriate "financial advisor" instead of a "financial salesman," then ask your estate planning attorney for a referral.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Think Advisor (March 24, 2018) “These 3 Threats Scare Gen Xers More Than Basic Retirement Costs: IRI”