Support for parents ranked (far) below “I haven’t thought about retirement expenses yet.”
More Gen Xers think about how they’ll pay for plane tickets and hotels when they retire than they do about budgeting to support their parents or children.
When Prudential Financial conducted a recent online survey of 2,000 American workers ages 43 to 48, only 12% of survey participants said they factored in the cost of supporting their children. Barely 4% expected to support their parents.
Budgeting for entertainment was more common, with 41% thinking about leisure costs after retirement and 40% thinking about travel costs.
Budgeting to support parents or children ranked below a dazed outlook: 15% of participants admitted, “I haven’t thought about retirement expenses yet,”
What it means
Gen Xers’ retirement budget priorities may seem odd, given that 35% of respondents said they have less than $10,000 in retirement savings, but the thinking of survey participants reflects how American retirees live today.
The Transamerica Center for Retirement Studies reported in 2018 that only 13% of retirees surveyed at the time supported relatives other than their spouse or partner, and about 39% said they spent their time traveling.
For financial professionals trying to help clients use annuities, cash value life insurance, mutual funds, or other retirement planning arrangements, the survey results may show a lot of work to do to convince Gen X clients that Gen X retirees don’t have retirement plans with defined benefits. or a large amount of home equity could face a different situation than that enjoyed by today’s retirees.
More data from the Prudential Survey
Planning: About 62% of survey participants said they considered health care costs when considering retirement costs, and 44% said they considered housing costs.
Traditional pension plans: Only 20% believe they will have income from a defined benefit pension plan when they retire.
Career Length Risk: 54% fear that they will be forced to leave their jobs earlier than they want.
Estate Planning: 12% hope that their inheritance will help them pay for their pension; 16% hope to leave their inheritance to someone else.
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