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Gen Xers and millennials are ready for retirement planning
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These generations present tremendous potential for you to reach new clients and strengthen your practice, while also helping them prepare better for retirement.
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Who are the Gen Xers and millennials?
Although both generations are planning for retirement and learning to save better, they still have unique financial situations that significantly impact the way you can best work with them.
Learn about Gen X
Understanding where Gen X stands
They want to learn strategies and wealth-building options. They're asking smart questions but need a good financial professional to point them in the right direction. An interesting takeaway seen in the recent Insured Retirement Institute (IRI) research4 shows Gen X wants to understand retirement options that provide downside protection, lifetime income, or both.
As their wealth continues to grow, Gen Xers will need to overcome any hesitation and prioritize planning and saving. As a sandwich generation, they may have a lot on their shoulders, caring for aging parents while raising their own families. They can benefit from help balancing priorities as they plan for tomorrow.
Read more about the sandwich generation
Did you know?
Gen X often feels overlooked. Between the baby boomers and millennials, they view retirement planning with hesitation.
Gen Xers believe there is a 42% chance they could outlive their savings.3
49% said they worry retirement may not even be an option.3
Learn about millennials
Understanding the millennial point of view
Millennials view financial planning as part of a relationship with their financial professional. With a willingness to learn, they're seeking a partner or coach to help them identify opportunities and make long-term financial decisions — it's not just about finding a portfolio manager.5
As digital natives, they may often expect easy integration of technology in their financial lives, including advice in a personalized model.5 They can also rely more on digital tools, robo-advice, and digital education sources, which shows they are open to learning.
Did you know?
85%
of millennials (together with Gen Z) are seeking coaching from a professional to help them avoid procrastination and rash investment decisions, according to a recent Nasdaq report.
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Their financial characteristics are unique
Saving for retirement is harder today than it was for previous generations. Here are three reasons why.
Housing costs
Home prices have surged alongside interest rates, causing
Gen Xers and millennials to face record-high mortgage costs.6
Debt loads
Student loan debt impacts all generations.
Gen X has the highest average balance at $44,240, while 39.9% of all borrowers are millennials.
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Retirement security
Opinions are improving, but
47% of non-retirees believe Social Security won't pay retirement benefits, adding to questions over savings.
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You can help Gen Xers and millennials improve their habits and provide them more saving options with growth potential and protection from risk. Based on what is suitable for each individual client, you may consider helping them with options like a Registered Index-Linked Annuity (RILA) or other annuities alongside traditional retirement savings. As long as it fits their needs.
Preparing for retirement can cause confidence to dip
Across generations, many felt more confident after the bull market of 2023. But Gen Xers saw the smallest increase in confidence.9
These individuals are the first group of U.S. workers to come of age with 401(k) plans as their primary retirement vehicle after employers shifted away from traditional pensions. But a 401(k) puts the onus on participants, which can be more challenging for those less informed on investing strategies and options.
Additionally, according to Intelliflo,10 more than a 1/3 of Americans (35%) don't seek financial advice from a registered financial professional because they don't believe they have enough money to hire one. It will be important to address this hesitancy to help you personalize your approach to and advice for these generations.
The average retirement savings for Gen X households is roughly $150,000 — far from the $1.1 million that Americans say they need to retire comfortably.8
Average retirement savings
Retirement savings goal
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Though these generations have shifted consumer behaviors, they're still looking for guidance
Both Gen Xers and millennials have a gap in knowledge around financial advice and access. Personalized strategies will be necessary to help them catch up and feel informed.
More than half (52%) of Americans turn to family for financial advice. Many also turn to digital sources.11
Financial professionals can win these clients over with adjustments to their digital and online presence. But remember: The goal is educating with a mentorship mindset. Share knowledge on savings plans and the details of your compensation model.
When it comes to digital connection, younger generations lead the charge.
See below for a look at how many turn to digital advice today.
These percentages show the growing trend for each generation as they turn to digital sources for financial advice. This includes social media platforms, blogs or vlogs, podcasts, and other online sources.11
Gen Xers and millennials also seek diverse strategies and expert guidance on more than portfolios. Millennials, for instance, take a proactive stance on estate planning but often lack the knowledge to execute it effectively. You can bridge this gap — offering insights that turn their financial curiosity into a solid plan.
48%
express interest in financial professionals' assistance when it comes to estate planning.
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Let's bring Gen Xers, millennials, and financial professionals together
These generations want to increase their savings and develop a truer picture of their financial security. Financial professionals play a key role in helping these generations navigate their future.
Many clients in these two generations are seeking guidance
This creates an opportunity for financial professionals to step in.
Reaching this audience may require you to:
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Fully embrace technology. Connect with clients where they are. Consider video for meetings and messaging platforms so they can stay connected more easily.
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Increase your online presence. Maintain a social media presence and interactive website to serve as a virtual financial resource, providing tools, tips, and easy connections.
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Prioritize relationships. When it comes to finances, Gen X and millennial clients want a partner. They're looking to learn from you, but they want to play an active role themselves.
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Focus on personalized plans. These generations want real-time updates, personalized insights, and easy-to-use tools that empower them to make decisions.
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Lead with education, not sales. Share blogs, videos, and other content to help these clients actively learn more about enhancing their financial security.
These generations want to learn from you and build trust before they commit. Read our 5 tips to connect with Gen X.
Financial professionals can reach these clients with personalized plans
Start your conversations by considering their unique goals, attitudes, and financial circumstances.
Tackle this new client opportunity
You can play a key role in elevating the next generation of retirees. Your guidance can help them plan more successfully.
Offer guidance on retirement strategies
Help them improve their budgeting
Show the benefit of maximizing retirement contributions
Highlight education and personalization
You can establish yourself as the trusted expert for Gen Xers and millennials
Learn more about the role of a financial professional in closing the savings gap.
Prepare your practice
1 Pew Research Center on defining generations.
2, 9 Schroders 2024 retirement survey on who works with financial professionals.
3 2023 Natixis survey looks at Gen X and their concerns on retirement.
4 Insured Retirement Institute on how these generations view investing.
5 Nasdaq report for statistic on younger generations' desire for financial coaching.
6 Experian report on record-high mortgage costs in the U.S.
7 Education data initiative on student debt amounts by age.
8 2023 Gallup survey looked at opinions on Social Security.
10, 11 Intelliflo survey on how generations are seeking financial advice.
12 Trust and Will report on interest in financial professionals' assistance.
13 YouGov report on how many Americans consult advisors.
