Allianz Study Reports More Bad News for Gen Xers

By Mike Bushnell • May 12, 2015 • 0 Comments
Echoing a recent study from Transamerica in which the vast majority of Boomers and Gen Xers expect to retire long after they turn 65, an Allianz survey reports that more than five in six Americans over 35 say traditional retirement is now “a romantic fantasy.”

Allianz’ “Generations Apart” study surveyed 1,000 members of Generation X (ages 35 to 48) and 1,000 Baby Boomers (ages 49 to 67). The study reports that those in their 30s and 40s are generally both pessimistic and passive about their future retirement plans.

More than two out of three (67%) Gen Xers said that the general targets for retirement savings are “way out of reach,” and about the same percentage reported that they will “never have enough money to stop working.” Perhaps it is a matter of wording, but the pessimism nearly directly contradicts a recent survey from HSBC in which just 13% of Americans felt they would never be able to fully retire.

However, nearly every study, including the Allianz study, agrees that Gen Xers have it the worst. In the Allianz study, both Gen Xers and Boomers agreed that the younger cohort has more financial pressures, more risk, and higher difficulty earning the kinds of income needed to successfully save for retirement. Gen Xers also feel more despair, with 44% responding that “it is useless to plan for retirement when everything is so uncertain.”

Much like in the Transamerica survey, in which just a tiny fraction of all respondents reported having ever actually written down a retirement plan, a majority of the Allianz survey’s subjects said they don’t know how much they even need to save. Three-in-five Boomers, those at or closest to retirement age, said “it is almost impossible to figure out what your (retirement) expenses are going to be,” while 72% of Gen Xers said the same.

With so many older workers feeling both apathetic and despondent about their future retirement prospects, there is a major opening for advisors to both educate employees and inspire them to make meaningful retirement contributions while they still have time, says Katie Libbe, Allianz Life’s vice president of Consumer Insights.

“The disconnect between planning and expectations from both generations is concerning, but it’s clear the financial services industry needs to provide more resources and support for Generation X,” Libbe said in the report accompanying the survey. “Whether they choose to start making simple changes on their own or get advice from a financial professional, [Gen Xers] must move past the negativity and take control of their finances.”