Generation X is more concerned than other generations about having enough money in retirement.
A study by LIMRA found that only 25 percent of Generation Y consumers — those 18 to 32 years old — and three in 10 baby boomers were very concerned about having enough money for retirement. But 36 percent of Gen Xers were very concerned.
"While many Gen X Americans are in the prime earning years, they are less likely to have a defined benefit 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. "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."
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Fewer than 20 percent of all Americans are very confident they will have a secure retirement. Boomers and Gen Xers were least likely to feel very confident about achieving a secure retirement (13 percent and 14 percent respectively), while 21 percent of Gen Yers said they were very confident they would have a secure retirement.
The study asked consumers to define retirement security. The top three descriptions chosen were "living comfortably" (24 percent), "having financial freedom" (23 percent) and "peace of mind" (16 percent). Almost three quarters of consumers surveyed reported that 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. As expected, workers over age 55 were more likely to have taken more steps, including calculating their retirement income, discussing planning with a professional and determining what their retirement expenses will be.
LIMRA also found that only half of Americans claim to be somewhat or very knowledgeable about investments and financial products. Women, younger Americans and lower-income Americans scored themselves lower than everyone else.
"In our most recent study, 6 in 10 women felt they had little or no knowledge of financial products and investments compared with 4 in 10 men," Salka said. "Interestingly, though, 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 household's financial decisions, in addition many will likely live longer in retirement, yet they still don't believe they have the knowledge they need."
Nearly half of Americans — more likely men and those with higher incomes — claim their financial knowledge was self-taught. Forty-six percent of Gen 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."
The study found that nearly four in 10 consumers were interested in learning more about generating retirement income; 3 in 10 wanted to learn about investment basics; and 25 percent wanted advice on how much to save and where. These statistics increased when looking at Gen Y consumers.
The findings are based on a nationally representative survey of 2,032 Americans. The survey was fielded in July 2013.
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