3 in 10 Gen Xers worry they’ll never retire, finds Natixis Investment Managers
Louise Watson
Next in line to retire, Generation X are worried about running short of money in retirement (48%), and 3 in 10 are concerned they’ll never have enough to retire, research by Natixis Investment Managers finds.
The research, conducted in collaboration with CoreData Research, assessed the fears of Generation X (born between 1965 and 1980) as they approach retirement, with the first cohort turning 60 in 2025.
It found that two issues — inflation and debt — are primarily shaping Generation X’s fears about retirement.
Nearly seven out of ten (69%) of Gen X investors say inflation has hurt their ability to save for retirement, and more than half (55%) report saving less due to higher everyday costs.
The burden of public debt is a mounting concern, with three-quarters of Gen Xers (77%) worried it will result in reduced retirement benefits, and 58% believing it will be hard to make ends meet without benefits.
Louise Watson, Country Head of Australia and New Zealand at Natixis Investment Managers, said, “Gen X are facing a complex set of circumstances that perhaps make them the generation with the greatest need for financial advice in modern times. Concerns about inflation, mounting public debt, global geopolitical uncertainty, and domestic issues like the housing and cost-of-living crises have made retirement a daunting prospect for most Australians in this cohort. At the same time, quality financial advice is difficult and expensive to access.”
More than half of Gen Xers (56%) say they will need professional advice to achieve their financial planning goals (48%) and specific retirement income planning services (44%).
However, 49% of Gen Xers prefer digital advice over in-person services, marking a significant increase from 35% five years ago. Notably, those turning to digital advice are typically combining it with a relationship with a traditional advisor, whom they hold in high regard.
Watson continues: “It’s no surprise that Gen X, who are often stressed and time poor as they take care of elderly parents while raising children and navigating demanding jobs, are early adopters of digital advice. While this technology will help meet some of the demand for financial advice, it can’t yet provide anywhere near the level of complexity and personalised advice of a good financial adviser, reinforcing the crucial role advisers still play for Gen X.”
Generation X have more to learn about investing
Nearly half of Gen Xers recognise the importance of gaining investment knowledge to make informed decisions, and 47% think it’s important for their financial advisor to help them understand investing.
The research shows there is a need for greater education around index funds as Gen Xers, like other investors, are making incorrect assumptions about passive investing at a time in life when misconceptions could prove to be costly.
Overall, 64% of Gen Xers understand that index funds are designed to provide returns comparable to the market, but more than six in ten (61%) think index funds are less risky and two thirds (67%) think they will protect them on the downside – a potentially risky sentiment as index funds deliver market returns, up and down.
Read the report: https://www.im.natixis.com/en-ch/insights/investor-sentiment/2024/gen-x-report
