How to help Gen X optimize their retirement planning
Now in their prime earning years, Gen X workers (ages 43–56) should consider maximizing their retirement savings—but many aren’t. Their retirement planning has taken a backseat as they try to juggle complex financial lives while caring for dependent children and elderly parents. Explore the financial challenges these workers face and how plan sponsors and financial professionals can work together to help them navigate the path to retirement.
Gen X financial resilience and retirement preparedness
Our 10th annual survey of American workers provides an eye-opening picture of Gen Xers. Nearly half are dissatisfied with their current financial situation, and only 35% think their retirement savings are on track or ahead of schedule. Moreover, they’re bringing their financial stress to work, with 83% worrying about money while on the job.
Supporting Gen Xers on their financial journey
We further discovered that these individuals don’t want to deal with these issues alone. They’re seeking support from their employers, including access to financial professionals. Offering a comprehensive financial wellness program can help address this need while potentially fostering greater employee loyalty. Over 78% of Gen Xers indicated they’d be more likely to remain with their current employer if such a program was available. These programs also provide an opportunity for financial professionals to showcase their value, as 55% of Gen Xers report that advice from financial professionals influences their decisions.
What should this support entail? Consider offering a combination of personalized tools and education that can help Gen Xers balance their current priorities with preparing for a retirement that could last multiple decades. Key topics might include:
The importance of saving today
Many Gen Xers plan to work longer to build their retirement savings. But the truth is, this might not happen: Sixty-two percent of workers left the workforce sooner than expected, either by choice or due to circumstances. This figure reinforces the need to make saving a priority and can be a great way to grab people’s attention. Of course, they may respond by saying, “I’d like to save more now, but I can’t”—which brings us to our next topic.
Creating a retirement saving strategy
Go back to basics to help Gen Xers get and keep their retirement savings on track. This means providing tools and resources that can help them:
- Figure out how much money they may need for retirement
- Identify their sources of retirement income such as retirement accounts, personal savings, and Social Security
- Set a realistic goal based on their financial situation to help close any savings gap
- Build this goal into their budget so it’s treated like a monthly expense
- Make the most of their workplace retirement plan through auto-increase, matching and catch-up contributions, and other plan features
Strengthening their financial resilience
Helping Gen Xers reduce their debt and tackle their other financial concerns can help them prioritize saving. This portion of your financial wellness program might include:
- Guidance on managing debt
- Tips for saving while paying down debt
- Strategies for building emergency savings
- College planning resources
- Education on caregiving issues
Building their investment know-how
Only 38% of Gen Xers feel knowledgeable about investing, which makes it difficult for them to choose investments that align with their retirement goals. To enhance their understanding, consider developing an investment basics webinar series that explains:
- Risk and return
- How the stock market works
- The difference between asset allocation and diversification1
- Common investment strategies
You might consider offering online investing tools and resources and one-on-one consultations with financial professionals to help supplement this education.
Developing a withdrawal strategy
Although Gen Xers are still busy building their retirement savings, they should also start thinking about how to make their money last potentially 20 years or more. To help get them started, you might create a program for preretirees that focuses on, for example:
- Inflation and longevity risk
- Common withdrawal (drawdown) strategies
- Taxation of retirement income
- The role of Social Security and Medicare
- Planning for healthcare costs in retirement and long-term care
By implementing some or all of these ideas, plan sponsors and financial professionals can help Gen Xers take control of their money—and their retirement. And the best part is you don’t have to start from scratch. Many retirement plan providers offer the tools, webinars, and resources we’ve discussed, so make sure you reach out to them for assistance.
Gen X retirement planning—potential benefits for all involved
Supporting Gen X in their retirement planning doesn't just benefit them, it also offers advantages for plan sponsors and financial professionals. With reduced financial stress, these workers may become more productive, helping to contribute to the business’s bottom line. Additionally, this support can foster goodwill and strengthen relationships. Essentially, it's a strategy that can help create long-term value for plan sponsors, financial professionals, and—most importantly—older American workers.
For more insight, view our full 2024 financial resilience and longevity report.
1 Neither asset allocation nor diversification guarantees a profit or protects against a loss.
Important disclosures
John Hancock’s 10th annual financial resilience and longevity survey, John Hancock, Edelman Public Relations Worldwide Canada Inc. (Edelman), June 2024. This information is general in nature and is not intended to constitute legal or investment advice. Edelman and John Hancock are not affiliated, and neither is responsible for the liabilities of the other. This report presents the results of research conducted by Edelman on behalf of John Hancock. The objectives of this study were to (1) quantify the financial situation and level of financial stress of John Hancock plan participants and American retirees; (2) determine the key triggers of financial stress; (3) understand the extent to which actions, including actual financial behavior and planning activity, ameliorate stress; (4) assess longevity and retirement preparation and readiness; and (5) investigate custom insight around how retirees are faring in retirement. This was an online survey comprising two participant samples: John Hancock plan participants and American retirees. The John Hancock plan participant sample comprised 2,623 John Hancock plan participants. The survey for this sample was conducted from 5/17/24 through 6/3/24, with an average survey length of approximately 18 minutes per respondent. Respondents were located from a list of eligible plan participants provided by John Hancock. The American retiree sample comprised 525 retired Americans, sourced through Angus Reid’s research panel. The survey for this sample was conducted from 5/13/24 through 5/28/24, with an average survey length of approximately 12 minutes per respondent. All statistical testing is done at 0.95 significance levels. Percentages in the tables and charts may not total to 100 due to rounding and/or missing categories.
The content of this document is for general information only and is believed to be accurate and reliable as of the posting date, but may be subject to change. It is not intended to provide investment, tax, plan design, or legal advice (unless otherwise indicated). Please consult your own independent advisor as to any investment, tax, or legal statements made.
Intended for plan sponsors
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