Retirement planning needs across generations. Credit: Shutterstock
Four out of five members of Generation X are not confident they will be able to maintain their current living standard after they stop working.
“With two-thirds of Gen X 401(k) participants having less than $100,000 in individual retirement assets, it is not surprising that many do not feel they will be able to maintain their standard of living in retirement,” according to the latest Cerulli Edge – U.S. Retirement Edition. “Members of this generation are entering a critical window in which a sustained bear market or recession could significantly impact when and with how much they retire.”
Like most 401(k) participants, Gen Xers need advice and guidance for saving during their remaining accumulation years and preparing to manage their savings in retirement. However, nearly 6 in 10 are approaching this important period without an advisor to help them plan for retirement, and nearly half do not feel qualified to choose their own retirement investments. One-third of those without an advisor say it is because the fees are not worth it, and 29% say they don’t know how to find an advisor.
Recordkeepers and advisors, if they are not already doing so, should be taking steps to provide this participant group with advice and guidance to help them navigate questions and optimize their savings during their remaining work years.
“Given this difficulty in finding an advisor and the belief that they cannot afford one, an opportunity exists for both recordkeepers and advisors to engage with participants, identify their needs and make them aware of how they can access help with planning and investment advice,” said Elizabeth Chiffer, a research analyst for Cerulli, an international research and consulting firm.
Two-thirds of Gen Xers without an advisor already rely on their retirement plan recordkeeper or employer as the main source of help with retirement planning. Cerulli recommends that advisors and recordkeepers leverage perspectives from their current clients to demonstrate the value of their services to Gen Xers.
“Seventy-five percent of Gen X 401(k) participants who work with an advisor say their help with retirement planning is very valuable; specifically, their assistance with creating a savings or drawdown strategy and with understanding how and when to claim Social Security,” Chiffer said. “It’s imperative advisors and recordkeepers work with pre-retirees to create a plan for optimizing their remaining earning years and transitioning their portfolio to provide for their needs in retirement.”
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.