Generation X’s skepticism about retirement may be warranted,
according to a report from the Insured Retirement Institute (IRI). Overall,
more than one-third of this demographic has nothing saved for retirement. Other research calls this generation by far the most stressed.
While retirement may still be years away, only 8% of Gen Xers
have enough saved to support themselves in retirement. Even among the oldest
Gen Xers, those aged 44 to 53, only 11% have adequate savings. To determine if
a Gen Xer has sufficient savings, IRI considered the amount needed for an
individual to purchase a deferred income annuity that would generate enough
annual retirement income to bridge the gap between the average Social Security
benefit and average expenditures for a retiree.
One problem could be that most Gen Xers—eight in 10—are DIY
investors who manage their money without any professional guidance. Only one in
five Gen Xers works with a financial professional. But Gen Xers who do seek
professional advice are twice as likely to have at least $100,000 saved for
retirement, compared with those who plan on their own. About eight in 10 Gen Xers
describe themselves as being somewhat or not very knowledgeable about
investing, and two-thirds rate their financial IQ as being average or low.
Those that have sought out advice say they are getting the help they need. More
than eight in 10 say their financial adviser has discussed their plans for
retirement, and seven in 10 of those who have consulted with a financial
professional have had a retirement plan prepared for them. Gen X members who
turn to professional services use them for investing (62%) and general
financial management (45%).
The age people think they’ll be able to retire
is creeping up: More than half of Gen Xers (58%) believe they will retire at
age 65 or later, compared with 51% in the previous IRI study, and 42% in 2012.
NEXT: Worries do not align with actual calculations