Gen X — Financial Literacy and Support Can Help Them Retire Better. As a member of Generation X, I have felt largely ignored by the retirement and financial services industries. It seems a majority of the marketing and rhetoric is focused on the Baby Boomers as they retire in droves, and on Millennials, who have a reputation for being hard to reach audience, and who is a desirable target because they also still have a ton of time on their side to save and invest for retirement.
‘Turns out I’m not alone. Gen X has a reputation for being the neglected “middle child,” overlooked by marketers in most industries. That said, at 50 million members strong, Gen X represents 15% of the population, according to the U.S. Census Bureau. Comparatively, 80 million Millennials account for a quarter of the population, and Boomers weigh in at 75.4 million.
Gen X may be the smallest segment of the adult population, but we are also the most in need of financial help and advice. We have more money than Millennials, and according to a 2014 Pew Research report, the average Gen X household earns about $12,000 more than their parents did at the same age, adjusted for household size and inflation. However, while we are making more than our parents, fewer than 50% of GenXers have as much wealth as they did at our age.
What’s more, we’re in our peak earnings years, yet our runway to retirement, and thus our time to build sufficient savings, is becoming shorter. On top of that, Gen X households have multiple competing financial priorities and obligations, including raising families, buying a home, and sending our kids to college. GenXers also face other issues around money. Unlike Boomers, who don’t talk about money, and Millennials, who talk about it all the time, GenXers tend to be indifferent to talking about money. This, however, doesn’t mean we don’t care about our finances — we just don’t always know where to turn for help, or how to ask for the help we need. This lack of financial literacy means we’re under-prepared and under-funded in most areas having to do with money, from insurance coverage to retirement savings.
And there’s more. GenXers tend to be a cynical bunch when it comes to financial institutions. We often mistrust them and ignore their marketing messages. (Ah, so perhaps GenX is less ignored by the financial industry than we realize — it’s just that we’re not paying attention.) In addition, only half of Gen X is comfortable with their level of knowledge about investing, according to Mintel’s Investment Trends US 2016 survey. That said, most of us know that investing is the path to a financially secure retirement, and more than half of GenXers also believe that investing is the only way to achieve real wealth.
So how do plan sponsors conquer these challenges to reach GenX and help them become more financially prepared for retirement? First off, don’t forget them. They’re an important part of your workforce, and they need help gaining and using financial knowledge. Helping them obtain that knowledge is key to improving GenXers’ overall financial success. Financial wellness programs can help educate GenXers about how to invest, and which investments are appropriate for them at this stage in their lives. These programs can also help them learn to manage their money better, and “find” money to set aside for future goals, like retirement. According to Mintel, engaging Gen X and, when possible, setting them up with personal interactions via meetings with advisors or other financial experts is key. These face-to-face encounters can help establish rapport and build trust, which is critical for this generation when it comes to their finances. ThinkAdvisor corroborates this, noting that trust engenders loyalty among members of Generation X.
What’s more, with better financial literacy comes improved behaviors. According to Transamerica Institute research from 2016, 52% of GenXers who worked with advisors had at least $100,000 in savings; conversely, just 27% of those without an advisor saved that much.
Finally, GenXers respond to messages with “meaning.” Boomers prefer you to give it to them straight, while Millennials like messages that set them in motion. Speaking to Gen X with meaning and purpose, i.e., asking them “what does money mean to you?” or “what would it mean to you to be able to save enough to have a fulfilling retirement?” will resonate far more than “straight talk” or preachy-sounding messages. In other words, help GenXers find meaning and purpose for their money, and the message is more likely to get through.
I’d add to that, be specific in the messaging. In fact, the less generic, the better. For example, I recently saw an ad online from a financial institution that was targeted to individuals in their 40s (a demographic I happen to fit). The message was “if you’re in your 40s, you need to save more for retirement to catch up. Save more, and enjoy your 40s!” Umm, that tells me nothing. I don’t even think it was an ad for a product to help me do that. Frankly, I can’t recall now what the ad was for, because I was so annoyed that it was, in my opinion, completely ineffective and useless, and a waste of 15-30 seconds of my time.
Here’s the point: Gen X may be a small, “lost” generation sandwiched between the Boomers and Millennials, but they should not be forgotten or ignored. Like any employee, they need financial education and support, too. By helping them learn how to better manage their money, fostering trust, and providing a way for them to find meaning and purpose for their money, you can help improve their financial well being and create opportunities for them to retire well.
