The study found that more than one-third (36%) of Generation X employees had this concern, compared with only one-quarter of Generation Y employees (ages 18 to 32) and three in 10 Baby Boomers (ages 49 to 68).
“While many Gen X Americans are in the prime earning years, they are less likely to have a defined benefit [DB] plan than Boomers and more likely to be aware of risks associated with retirement and the challenges they face to save enough to achieve a secure retirement than younger consumers,” said Alison Salka, corporate vice president and director of LIMRA Retirement Research, Windsor, Connecticut. “They also may be managing multiple financial demands like saving for a child’s education or helping older parents. Meanwhile, Baby Boomers probably already have a realistic picture on their retirement outlook.”
The study found that less than 20% of Americans are very confident they will have a secure retirement. Boomers and Gen Xers are least likely to feel very confident about achieving a secure retirement (13% and 14%, respectively), while 21% of those in Generation Y said they are very confident they will have a secure retirement.
The study asked people to define retirement security. The top three descriptions chosen were “living comfortably” (24%), “having financial freedom” (23%) and “having peace of mind” (16%). Nearly three-quarters of those surveyed said they have taken at least one step toward a secure retirement. Contributing to an employer-sponsored retirement savings plans was the most common step among full-time workers. Workers ages 55 and older were found to be more likely to have taken more steps, including calculating their retirement income, discussing retirement planning with a professional, and projecting what their retirement expenses will be.
LIMRA also found that only half of those surveyed claim to be somewhat or very knowledgeable about investments and financial products. Women, younger Americans and lower-income Americans scored lower than their counterparts.
“In our most recent study, six in 10 women felt they had little or no knowledge of financial products and investments compared with four in 10 men,” said Salka, “Interestingly, women and men had similar average scores on a financial literacy quiz LIMRA offered earlier this year. Research has shown that women control or play an important role in most households’ financial decisions, yet they still don’t believe they have the knowledge they need.”
According to the study, nearly half of Americans—more likely men and those with higher incomes—claim their financial knowledge was self-taught. Forty-six percent of Generation Y consumers list their parents and other family members as their primary source of information, while one-quarter of this same group cited learning from the mistakes of others.
Americans are interested in learning more about various financial topics, Salka noted. The study found that nearly four in 10 people are interested in learning more about generating retirement income; three in 10 want to learn about investment basics; and 25% want advice about how much to save and where. These statistics increase when looking only at responses from Generation Y.
“Retirement readiness is in the news these days, but, without the knowledge or guidance to help them make appropriate choices, consumers are likely to fall short of their financial goals,” said Salka. “The industry can take advantage of this appetite for knowledge by implementing financial literacy programs to help consumers learn how to budget, get out of debt, save and plan for retirement. This will benefit not only the industry but the nation as a whole.”
The study findings are based on a nationally-representative survey of 2,032 Americans, which was conducted in July.