Data & ResearchMarch 25, 2009

Gen X Most Financially Stressed, According to Scottrade

The number of Generation Xers (ages 27 to 42) who are unprepared for retirement is dramatically on the rise, according to a study commissioned by Scottrade.

Reported by Rebecca Moore

Gen Xers are also taking many steps to help ease their financial stress—including paying more attention to fees from brokers and investment firms (cited by one-third of respondents).

In a press release, Scottrade said more than half (52%) of Gen Xers currently have saved less than $25,000 for retirement—a significant change from 2008, when 40% reported being below the $25,000 mark. Almost two-thirds of Gen Xers (63%) saw the value of their retirement accounts decrease last year, and more Gen Xers (15%) had to withdraw funds from their retirement accounts than any other non-retired generation.

Scottrade said that of all the generations, Gen X is the most worried that Social Security will run out (62%). The dual stresses of smaller savings and lack of confidence in Social Security are drivers of Gen X’s top financial concern: not having enough money for retirement (64%).

According to the press release, Gen X is the most financially stressed generation for the second year in a row. Given a list of 18 general financial concerns, Gen X, more than any other generation, is “extremely” or “very” concerned about the following issues:

paying for unexpected, major expenses (61%)
managing day-to-day expenses (60%)
having too much debt (57%)
paying off credit card balances (52%)
having no/reduced income due to job loss (52%).

However, the survey found Gen X is also the most proactive generation, with 98% taking actions to offset financial stresses, including:

comparing prices to find the best deal (69%)
using coupons (66%)
cutting back on entertainment (65%)
paying down debts (57%)
reducing credit card spending (55%)
cutting back on travel/vacations (46%)
paying closer attention to the fees many brokers and investment firms charge for their services (33%)
cutting or eliminating services such as cable TV (30%).

The 2009 American Retirement Study by Scottrade polled 1,000 Americans 18 years of age or older using Synovate’s national online omnibus survey, eNation, in January.