U.S. workers are tired of seeing comparisons broken down by generations when it comes to finances, according to a new survey from Empower Retirement.
Employees said they are focused on financial planning significant to them, including getting married, managing debt or paying a mortgage. Eighty percent of employees surveyed said they believe their views were created by individual experiences and personal characteristics, and not the generation they were born into. In fact, 38% said their personal views and opinions were shaped by their parents, while 33% attributed particular familial values for their beliefs.
“It doesn’t make sense to lump an entire generation of millions of people into one group and assume they all have the same experiences or think about financial planning in the same way,” explains Edmund F. Murphy III, president and CEO of Empower Retirement. “Financial planning and goals should meet people where they are in life, consider their life experiences and personal characteristics, and then lay out a strategy that helps get them to their savings goals.”
According to the survey, 65% of respondents said generational differences are “overstated,” 53% noted their ideas and feeling about money varied greatly throughout each life stage and 40% identified more with others who are going through similar life events than those in defined generations.
Christina Cutlip, senior managing director, client engagement and national advocacy at TIAA in Washington, D.C., previously told PLANSPONSOR that what is needed most today is an expanded employee engagement strategy that takes into consideration what participants have been through. Many participants may have stopped contributing to their retirement plan because of household income losses or illness, or perhaps some simply lost confidence with investing due to market volatility. “In these cases, it’s critical to re-engage with these employees and get them involved again with their financial and retirement planning,” she says. The key is delivering relevant content and support. Other experts recommend providing “moments that matter” communications when employees are facing major life events.
Additionally, survey findings highlight how recent economic events can shape long-term finances for individual workers. For example, it’s likely the pandemic and its strain on finances and the economy will form future financial attitudes and behaviors, the paper says.
The effects of the pandemic have led some workers to halt retirement planning. When asked what their biggest barrier to retirement planning was, 27% said numerous large payments are hindering their focus on saving for retirement, yet 25% listed “saving for retirement” as their top goal for 2020. Thirty percent are determined to pay off their personal debt in 2020, and 19% would like to build an emergency fund. Only 8% are hoping to pay off their student loans, even as employers may offer additional student loan repayment help.
More information about the survey, “It’s Not About Generations,” can be found here.
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