And they’re not the only generation that’s starting to feel that way.
It appears that Millennials (those under age 35), are saying live for today, tomorrow is not promised and they’re not the only ones, Gen Xers (35-49) seem to be saying so too. Schwab, a retirement services company surveyed 1000 people with a 401(k) retirement plan and found Millennials are not willing to sacrifice their quality of life and trade “dinners out and vacations” for retirement saving. Student loan debt may also be another factor keeping them from thinking about saving for retirement.
To be fair, Millennials are not the only ones sacrificing their future wellbeing for the present. Generation X also faces obstacles to saving. Their biggest obstacle, like Millennials, is also an unwillingness to sacrifice their current lifestyle “quality of life.” But while Millennials also have to go through the hurdle of student loan debt, for Gen Xers their secondary reason is to save for their children’s education. They are also the generation most likely to dip into their 401k a plan which is usually a big no-no if you want to save effectively. Additionally, even though close to 60 percent (58%) know how much they should be saving for retirement, just a little over half (53%) believe they are saving enough to retire comfortably.
As for those on the cusp of retirement, Baby Boomers (50-70), their physical health trumps their future financial health:
“On the whole, this group is more concerned about being healthy enough to enjoy retirement (61%) than having enough money to enjoy it (39%).”
Unsurprisingly, Boomers are the ones above all other generation who are seeking financial advice from the pros and are very confident in their readiness for retirement. Sixty-three percent believe they are saving enough to retire when they want, 65 percent say they’ll be retired comfortably in 15 years and 22 percent say they’ll retire, but not comfortably.
“As the survey results show, at every stage of life, people have competing priorities that may interfere with their ability to retire comfortably at the end of a long career,” concluded Catherine Golladay, vice president of participant services and administration at Schwab Retirement Plan Services. “While balancing financial responsibilities can be a tall order, saving in a 401(k) should remain at the top of the priority list.”
If that’s really the case, then Gen Xers could be in big trouble. According to the survey, “Gen X is the group most likely to have taken a loan from their 401(k): 31 percent have done so, compared to just 13 percent of Millennials and 29 percent of Baby Boomers.” They also realize that they need help, but knowing is just half the battle. Three-quarters (76%) of Gen Xers claim they would like help managing their 401(k), yet only 22 percent are likely to seek out professional investment guidance, and just 7 percent are currently receiving it. As for Millennials, “Six in ten wished there was an easier way to choose the right investments for their 401(k).”
And what about Baby Boomers? More than any other generation, Boomers are the ones currently getting 401(k) investment advice.
The results of the survey are a little disconcerting but not surprising to Gary Herman, Consolidated Credit’s president.
“The results with Millennials are less concerning because they’re the farthest out from retirement, although the earlier you start saving the better prepared you will be when that time approaches. It is the older generations that concern me, especially with Gen Xers dipping into their 401(k). In many cases the money that comes out never finds its way back in.
“As for Boomers, they seem to be on to something. One of the surprises and biggest regrets retirees encounter as they enter retirement is the hefty cost of healthcare. Prevention is better – and typically more cost-effective – than a cure. People nearing retirement need to strike a balance between physical and financial health to prepare for the uncertainty the future holds.”
While you take care of the physical health aspects we have some tips to help you take care of the financial. Consolidated Credit has an invaluable debt-free retirement guide that caters to everyone, regardless of age, to help you achieve your retirement goals. If you’re struggling with financial issues such as credit card debt, we may be able to help you get out so you can put those payments towards your future instead. Dial for free or take our free debt and budget analysis online.