Gen X Pessimistic (No Way!) About its Retirement Future

Retirement reality bites

401k, Gen X, retirementKids from the 1980s are still grappling with financial fear.

Stop the presses—Gex X is pessimistic. At least when it comes to retirement saving and their financial futures.

Just one-third of Generation X investors are confident in their ability to address financial concerns and meet their long-term financial goals—the lowest among the generations surveyed, according to MFS Investment Management.

Generation X is often referred to as the new “sandwich generation” because many of them are responsible for both raising their own children and caring for their parents.

“Unfortunately, many Generation X investors are woefully unprepared for retirement,” Doug Orton, MFS Director of Business Development, said in a statement. “They are desperately looking for guidance.”

In fact, 85 percent of Generation X investors surveyed said they look to their financial advisor for retirement savings advice, he added, and approximately 60 percent say they will rely on their advisor more in the coming years.

Seven in 10 Generation X investors say they have delayed, or expect to delay at least one major life event, such as buying a house, saving for their children’s education, starting a new career and ultimately, retiring.

“This generation is under a lot of pressure,” Orton claimed. “Wage growth has been stagnant over the past decade and we’ve had two major market downturns since the turn of the century This means they’ll likely need to save more in the years ahead if they want to reach their retirement goals.”

Their younger counterparts stand in stark contrast, and have a high degree of confidence (or rather overconfidence) in their financial futures.

The 2017 MFS Heritage Planning Survey found that like Generation X, Millennials are also pushing out significant family and career milestones. Eight in 10 Millennials have either delayed, or expect to delay a major life event and nearly a quarter of those surveyed said they have held off on having children or buying their first home.

Still, Millennials are fairly optimistic about the future. Seven in 10 believe their financial situation will improve over the next three years and roughly half of those surveyed are confident in their ability to meet their long-term financial goals.

“Having grown up in the information age, it’s not surprising that 40 percent of Millennials surveyed say they are highly knowledgeable when it comes to investing,” said Jim Jessee, Co-Head of Global Distribution with MFS. “However, when you look at their investment behaviors there is a clear knowledge gap that needs to be addressed.”

Seven in 10 Millennials surveyed say that growing assets and generating income are their primary investment objectives.

However, according to the survey, this generation has over a third of its assets allocated to cash and certificates of deposit–two asset classes that are geared toward protecting capital. This misallocation is likely the result of too many investment options. Six in 10 Millennials surveyed say they are overwhelmed by the number of available investment choices.

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