AARP: Generations X and Y See Changing Retirement Landscape but Fail to Save Enough

March 19, 2008 -- Members of Generations X and Y, acknowledging that they need to pick up the slack when it comes to planning for their futures, are thinking about retirement and have defined financial goals according to a report released today by the Divided We Fail group (AARP, Business Roundtable, National Federation of Independent Business and the Service Employees International Union) and the American Savings Education Council (ASEC).

According to "Preparing for Their Future: A Look at the Financial State of Gen X and Gen Y," three out of four Gen Xers and Gen Yers said saving for retirement is a personal financial goal, and an overwhelming majority (92 percent) feels that they can achieve their most important financial goals in the next ten years. However, many younger Americans grade themselves poorly when it comes to saving money (42 percent gave themselves a D or F) and investing their money outside the workplace (47 percent gave themselves a D or F).

"These generations face new challenges when it comes to building lifetime financial security," said Nancy LeaMond, Executive Vice President of Social Impact at AARP. "The good news is that they realize how the retirement landscape is changing and are confident that they can achieve their financial goals, the bad news is that they know more about making their iPod work than making their savings work for them."

While 86 percent of Gen Xers and Gen Yers know they should be more prepared for a "rainy day," many report that they know more about their iPod (40 percent very knowledgeable) than they do about filing their taxes (26 percent), buying a home (21 percent), investing outside of work (15 percent) and saving for retirement (15 percent).

"Financial education is essential from the earliest ages if the youth of today and tomorrow are going to stand a chance of financial survival as 'spend and borrow' messages are thrust at them every hour of every day they are not in a classroom. And even then they may receive such a message on their cell phone or iPod. This survey is a wake up call for action now," said Dallas Salisbury, chairman of the American Savings Education Council, a coalition of savings education organizations.

Young people place a high value on benefits in the workplace such as health insurance (94 percent), retirement savings plans (88 percent), matching or contributing to a retirement savings plan (89 percent), wellness plans (78 percent) and offering financial education/advice (77 percent). While they may look to the workplace for tools, 70 percent of Gen Xers and Gen Yers look to their parents for personal finance advice and guidance.

"A more financially aware generation of boomers can take the opportunity to share their experiences, mistakes and successes in planning for retirement," agreed the Divided We Fail organizations. "All of us, individuals, employers and even parents must take action to develop solutions large and small to make sure all generations are prepared."

An online survey of 1,752 young people was conducted in early 2008. For the purposes of this report Gen X includes those respondents ages 28 to 39 years old (born 1968 to 1979) and Gen Y includes those between the ages of 19 and 27 (born 1980 to 1988).

Divided We Fail, launched nationally in January 2007, has worked to engage the American people, elected officials and the business community to find broad-based, bi-partisan solutions to the most compelling domestic issues facing the nation: health care and the long-term financial security of Americans.

Source: AARP

Bookmark/Search this post with:

 •    •    •    •    •    •    •    •    •    •    •    •