Turns out Generation X—that cynical, dour bunch—ultimately wants financial security.
Over 75 percent of the demographic’s 401k participants are focused on having financial peace of mind above all else when it comes to money-related goals. This objective is closely followed by maintaining an acceptable quality of life and saving for retirement in a 401k, according to a new study by T. Rowe Price.
The firm’s Retirement Savings and Spending report defines Generation X as anyone age 36 to 51 as of the year 2017. Among survey participants, 34 percent have considered delaying their retirement date in the last 12 months in order to better meet financial objectives.
“Those in Generation X are at a time in their lives when awareness and concern for their retirement savings is steadily increasing,” said Anne Coveney, senior manager of retirement thought leadership at T. Rowe Price. “Fortunately, this generation has shown a desire for financial advice to help them reach their goals. They are also at a stage in their lives where there is time to adopt strategies that can make these goals more attainable.”
Gen X retirement savers look to 401k plan providers for advice before turning to their employer, financial advisor, online tools or family and friends, the study says. Forty percent would prefer that guidance came from a human, while 39 percent are okay with part person-to-person, part digital advice.
On average, 401k participants in this age group are contributing 9 percent of wages to retirement savings. Around 65 percent chose this amount in order to take full advantage of their employer’s match, the report says. However, T. Rowe Price recommends a contribution rate of 15 percent for Gen Xers.
Why are they contributing less? The report indicates competing financial demands, such as reducing debt and financing children’s educations, in addition to maintaining quality of life and budgeting for everyday expenses, are all factors.
“The top three financial objectives cited as major by Generation X reaffirms our view on the importance of providing financial wellness programs alongside a 401k,” said Aimee DeCamillo, head of T. Rowe Price Retirement Plan Services, Inc. “Employers can support their Generation X participants by providing a retirement savings program that offers a clear financial wellness strategy focused on budgeting, prioritization and tracking.”