Change is hard for everyone, especially when you've prepared for a milestone event, only to have the rug pulled out from under you after learning what you did to get ready wasn't enough. For example, after long touting that the average person needs $1 million in savings to retire comfortably, some financial experts say it really ought to be closer to $2 million, due in part to people living longer.
But a bigger problem lies in the fact that many Americans – including those who are less than a decade away from the traditional age people leave the workforce – haven't saved anything whatsoever for life post-career, a newly released survey indicates.
Over 33 percent of Generation X hasn't saved anything for retirement, according to a recent poll conducted by the Insured Retirement Institute.
"Only 11 percent of 40- and 50-year-olds have saved enough to retire."
The study of working-age adults between 34 and 53 years of age, asked respondents what they had been doing over the course of their careers to prepare for the cost of living in their golden years. Less than 1 in 10 – 8 percent – said they were confident they had sufficient savings to last them the duration of their retirement. Even among those who were fairly close to calling it a career, those who ranged between 44 and 53, just 11 percent had confidence what they saved up would last.
Generation X still has time to save
Cathy Weatherford, IRI president and CEO, noted that even though Generation Xers are closer to retirement than millennials, what they have working in their favor is time. However, they can't afford putting off saving any longer – quite literally.
"To ensure they can achieve a secure retirement, GenXers will have to exercise diligence in the years ahead by committing to increasing savings and contributing to their retirement plans," Weatherford warned.
Part of the savings dilemma many Generation Xers are caught up in stems from debt, much of it from unpaid student loans. According to a recent poll conducted by Gallup, 25 percent of Generation X still carries student loan debt. This compares to 19 percent of Americans overall who are in the same debt-addled situation.
Retirement expenses are prepared for and anticipated, but emergencies, by their very nature, are unplanned. About half of U.S. adults say they wouldn't be able to pay for an expense that came up suddenly, according to a separate poll performed by Gallup. This includes 25 percent of adults making a salary between $90,000 and $120,000 per year.
Financial advisors bring results
Americans who have the wisdom to pursue advice from financial professionals are better able to achieve their retirement dreams. The study from IRI found that among members of Generation X, 20 percent have worked with a financial advisor. Of those who have, they were two times more likely to have at least $100,000 put away compared to those who didn't pursue expert advice.
Leveraged Planning® Solutions may be your clients' solution to retirement readiness. For more information on how it works and who is best suited for it based on your clients savings and net worth, speak with a Global Financial Distributors advisor.