Five-Generation Study: Millennials Face Increased Retirement, Financial Challenges

Society of Actuaries Launches Strategic Research Initiative to Provide In-Depth Insight into Financial-Related Aging and Retirement Issues

SCHAUMBURG, Ill., October 3, 2018 – The Society of Actuaries (SOA) released a series of reports examining financial challenges and perspectives on retirement planning across the Millennial, Gen X, Late Baby Boomer, Early Baby Boomer and Silent generations.  This inaugural study from the SOA’s new Aging and Retirement Strategic Research Program builds on existing research focused on the societal impact of aging populations and the solutions for mitigating retirement risks.

The first report, Financial Priorities, Behaviors and Influence on Retirement , provides comprehensive insight into how each generation is focusing on financial priorities and preparing for a financially secure retirement. Key findings include: 

  • Millennials are generally struggling to establish themselves financially. This generation has a unique set of financial challenges compared to other generations, including being able to build up an emergency fund, saving for a home, paying off their credit card debt and larger student loans than prior generations – which may affect their ability to achieve a financially secure retirement later in life.
  • Gen Xers exhibit significantly more financial confidence, including an increased focus on saving for retirement. Few report student loans, enabling them to shift their focus on longer term planning.  Eighty percent of the survey respondents from this generation have access to an employer-sponsored retirement plan.
  • Late Baby Boomers are the most focused on financial planning, with the majority of this generation gearing up for retirement, and 51 percent reporting that their financial planning horizon is three or more years. They are targeting investments to grow their money and produce income both now and in retirement.
  • Early Baby Boomers are most likely to be working with a financial advisor. They are also the most financially stable generation, with six in ten reporting they can afford an unexpected expense of $10,000. Additionally, approximately three-quarters of Early Baby Boomers report being retired.
  • The Silent Generation has much fewer savings priorities and tends of think of their finances in terms of the rest of their lives, which makes sense since almost all say they are already retired. In addition to Millennials, the Silent Generation is the most likely group to express a lack of financial stability – highlighting the overall financial vulnerability of this age group. 

“This research demonstrates that consumers face unique financial priorities throughout all stages of life, and that even the oldest group we studied, the Silent Generation, is not free from vulnerability,” said Anna Rappaport, FSA, MAAA, chair of the SOA Aging and Retirement Strategic Research Program. “Millennials in particular should pay-off student loans and other debt, so that they can take steps to focus on longer-term issues, such as retirement security. This is especially important knowing the challenges their predecessors still face and that they may face even tougher financial challenges due to the large student loan balances many have when they enter the workforce.”

The second report, Difficulties in Gaining Financial Security for Millennials , offers in-depth analysis into the unique financial challenges of the Millennial generation, which is generally less financially stable compared to other age groups. The current lack of financial stability may affect the generation’s financial preparedness for retirement later in life. Key findings include:

  • Thirty-four percent of Millennials indicate that debt is complicating their ability to manage their finances today. This generation also reports the highest volume of student loans – one in three –compared to all other generations. Paying off high volumes of debt may make it difficult to save for retirement in the future. 
  • Millennials indicate substantial retirement concerns compared to other generations. This age group is more likely to be concerned about the value of their investments keeping up with inflation, that they may not be able to maintain a reasonable standard of living, or that they may deplete their savings in retirement.
  • These concerns around retirement make Millennials more likely to feel overwhelmed by their financial situation. Forty percent of Millennials feel this way, compared to 22 percent of all other generations.
  • Fifty-six percent of Millennials say their generation has it harder than their parent’s generation in terms of achieving financial security. Forty-four percent of Baby Boomers and the Silent Generation also acknowledge that the younger generations have it harder than they did in terms of achieving financial security.

Future research from the SOA’s Aging and Retirement Strategic Research Program will include analysis into family considerations for retirement planning, retirement risk management, the impact of debt and fraud on retirement financial security and an overview of male and female perspectives on retirement.

To emphasize the expertise and thought leadership of actuaries, and help provide insights to members, stakeholders and the public on socially relevant topics, the SOA will launch additional Strategic Research Programs on actuarial innovation and technology, mortality and longevity, health care cost trends, and catastrophe and climate in the coming year.

For additional aging and retirement research from the SOA, please visit: /strategic-research/aging-retirement/.

Survey Methodology

This research presents the results of an online survey conducted by Greenwald & Associates, on behalf of the Society of Actuaries. The purpose of the study was to understand the priorities and strategies of Americans across the generations. The research also seeks to understand how retirement planning and savings fits in for Americans. The study focuses on five different generations: Millennials, Gen X, Late Baby Boomers, Early Baby Boomers and the Silent Generation.

Using Research Now’s panel, Greenwald conducted an online survey of 2,001 individuals: 398 Millennials, 399 Gen Xers, 403 Late Boomers, 401 Early Boomers, and 400 from the Silent Generation. The survey was conducted from July 17 - July 27, 2018.

About the Society of Actuaries

With roots dating back to 1889, the Society of Actuaries (SOA) is the world’s largest actuarial professional organization with more than 30,000 actuaries as members. Through research and education, the SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal challenges. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk.