Nearly half (49%) of respondents to the 6th annual New Year’s Resolution Survey from Allianz Life Insurance Company of North America say health/wellness is the most important focus area for the upcoming year.
Only
30% of respondents chose financial stability as their top focus for 2015. However,
Americans show an interest in getting professional help with managing their
finances.
Nearly
one-quarter (23%) of respondents said they are more likely to seek the advice
of a financial professional in 2015, up from 19% in 2013. More Americans (36%)
also selected “financial professional” as their top choice if they had free
access to assistance from a top professional, ahead of nutritionist/dietician
(28%), personal trainer (23%) and career counselor (13%).
In
terms of bad financial habits that are holding people back from achieving their
financial goals, results were similar to previous years. Top responses this
year included “not saving any money” (28%), “spending too much on things not
needed” (27%) and “saving some money, but not as much as I could” (24%).
When
asked about the one thing they could do to improve their finances in 2015, most
respondents said “pay off credit cards” (19%), followed by “build up my
emergency savings” (17%) and “increase my retirement savings” (14%).
“It
is encouraging that there is some recognition about the importance of
addressing retirement savings. The New Year is a great time to evaluate your
financial plan, and whether people choose to go it alone or utilize guidance
from a financial professional, any proactive step can help lessen financial
stress,” says Katie Libbe, vice president of consumer insights for Allianz
Life.
Allianz Life
conducted an eNation online survey in November 2014 through Ipsos with 1,004
respondents.
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Few companies acknowledge Gen X, those born between 1965 and
1980, and their most troubling financial planning concerns, according to “Leveraging
the Gen X Retirement Market: From Overlooked to Opportunity.”
After a large blow from the 2008 financial crisis, Gen Xers
are trying to lead healthy lives today to prepare for their later years, but
very few are planning for their future health care costs in retirement, even
though it’s a top worry.
“The oldest members of this generation, the ones born in
1965, are turning 50 in 2015,” says Brooke
Worden, senior vice president of financial services at Weber Shandwick. The significance
about age 50, she tells PLANADVISER, is that people become eligible for
membership in AARP, and it caught Worden, herself a member of Gen X, by
surprise when she saw Tweets by AARP anticipating the new members.
“It will probably catch a lot of others by surprise,” Worden
says. “Retirement is not as far off as we think.” The point of the study is to
shine a spotlight on the immediacy of retirement for Gen X.
This generation is overlooked by a lot of financial services
companies, according to Worden. “They don’t have the numbers and the wealth compared
with Boomers and even Millennials,” she says. Weber Shandwick observed that
often when financial services firms do segment investors and retirement plan
participants by generation, they tend to focus on Millennials and Baby Boomers,
but not on Gen X, making it an important opportunity for the industry.
The study found that Gen X is an engaged group of workers
and investors who are doing many things well. But, Worden emphasizes, there is
a significant problem that plan sponsors and advisers can help with: “They don’t
feel prepared,” she says. “They have significant anxiety around their level of
preparedness. They are pretty financially savvy, but they have a high level of
anxiety about whether it will be enough.”
Health Care Anxiety
Their anxiety is driven higher by the need to account for
long-term health care costs in retirement. “I would characterize it as a
generational blind spot,” Worden says. This generation is trying to take care of
their current health, paying attention to exercise regimes, and the need for a
healthy diet and adequate sleep, but all these present a challenge because Gen
Xers are so pressed for time.
Between work, children, and possibly caring for aging parents,
Worden notes they are also trying to save for college and their own retirement,
making it hard for them to find the time to take care of themselves physically.
But the desire is there, she says. “They want to prevent catastrophic health
care events.” The subject causes much more anxiety than other parts of preparing
for retirement.
Retirement plan sponsors should try to make things as easy
as possible. “I think simplicity is key for this generation, because they are
so time pressed,” Worden says. Automatic features in a plan, such as auto-enrollment
and auto-escalation, are important. And the addition of advice through plan
design is also important to help them take control of their financial lives.
Auto features mean one less thing for plan participants to
do. “It adds to the simplicity to be able to set it and forget it,” Worden
points out. She says she does not like the word “forget,” but that being able
to automate positive behaviors and adding advice components so that Gen Xers can continue to
monitor plan performance is an effective combination.
“Gen X members like scenarios and projections,” Worden notes,
especially when the examples provide relatable images. “That is an effective
way to build trust—it reinforces that the plan is speaking to them as a Gen Xer.
Relevant Examples
Any images that may resonate with a Boomer audience—an older
couple strolling on the beach, or a picture of a lighthouse—are unlikely to be
relevant, Worden says. “It’s attractive, but I don’t relate to it as a Gen Xer.
It doesn’t seem realistic,” she says. “That’s not me. That’s not my generation.”
In part because Gen Xers are still solidly engaged in
raising families and possibly sandwiched between the financial demands of other generations, she feels the
image of a multi-generational family could resonate in communications and
targeted messages. “Maybe a family sitting around a kitchen table, or a family
in a car,” Worden says, “a multi-generational family, with members of Gen X
relating to older parents and children at the same time.”
Plan sponsors and advisers should aim for accessible
communication. Simplicity and authenticity are not enough. The messaging should
be accessible in a variety of channels, Worden says: “Digital, mobile apps and
devices,” she says. “I think that is very important to Gen X. Some may prefer
more traditional, in-person session at the worksite, but others may not.”
Worden feels the industry faces a challenge in responding
and communicating with these new participants in ways that it hasn’t previously. “They may be too time-pressed to
participate,” she says. “They want something served up when it is convenient
for them; like a YouTube video they watch at night when the kids are in bed, or
some kind of on-demand education they can access over a weekend.”
As well as leveraging technology to the fullest extent, she
says that another component is looking at participant segments with a fresh
eye. “The world has changed,” she says. “The industry is not speaking to Gen X
in a unique, distinct way, but this means plan sponsors have an opportunity to build
trust with them. They are very hungry and open to being reached—they know it’s
important and they are a sizable wealth segment they lack confidence; they want
help they are very receptive. But it has to be relevant.”
“Leveraging the Gen X Retirement Market: From Overlooked to
Opportunity” can be downloaded here.