Retirement advisors have plenty of tools to help the Gen X population create a successful retirement plan that they control
The numbers are telling. According to an Allianz survey, Gen
Xers – typically defined as adults in their late 30s to late 40s – have had
debt impact their retirement savings. That includes credit card debt and
student loan debt. The average debt amount per household - $16,000.
How they’re responding to their debts is equally concerning.
Nearly half of those surveyed feel they can’t focus on retirement saving until
they pay off their credit card debt. Even more concerning is how they plan to
approach retirement – 63% of Gen Xers say they’re confident it will “just work
out” for them in retirement.
And they’re willing to go it alone. Just 39% of Gen Xers are
working with a financial planner, says the Allianz survey. That same percentage
is open to professional advice, but retirement advisors will have to let them
remain in control – a whopping 70% of those surveyed will still make their own
decisions and plans even with the help of a financial professional.
Still, retirement advisors have plenty of tools to help the
Gen X population create a successful retirement plan that they control. Some
methods advisors can use to help bolster the Gen Xer’s retirement account
financial wellness checkups. A comprehensive view of your plan
participant’s personal financial picture, including savings, expenditures,
debt, and changes to lifestyle or financial commitments, can help them see
where their money is going and how to make changes now to secure retirement
Encourage automatic enrollment
and deferral increases. A study of Mercer’s defined contribution plan
showed that automatic enrollment participants who participated in automatic
contribution increases realized a 25% higher contribution rate than those
without automatic deferral increases. Review automatic enrollment and deferral
increase programs with plan sponsors.
Show them the big
picture. Using information from the financial wellness checkup, build a
realistic financial portrait of what your Gen Xer participant can expect to
have saved in retirement. Show the wish list items in relation to their current
savings options. Coupled with the big-picture financial view of retirement,
retirement advisors can use charts showing the different financial outcomes
given how much of the Gen Xer’s salary has been saved toward retirement. A simple move such as bumping up
contributions from 6 percent to 8 percent can have a significant impact.
After the meeting is over or the workshop is a week old, retirement becomes a
back-of-mind topic for most plan participants. Shortly after the meeting, send
out an emailed reminder of what was discussed. A month later, send
correspondence that reiterates what your participants learned in the
meeting/workshop. Keep communication flowing and their retirement goals on
Gen Xers aren’t saving for retirement because they don’t want to, but because they can’t see beyond their immediate financial roadblocks. Retirement advisors are in a great position to become the trusted resource they need to vastly improve their retirement savings picture.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal