GenX Marks the Spot

If in the past you’d mentioned GenXers–52 million Americans born from 1961 to 1981–you might have conjured up an image of disloyal slackers who don’t do much to recommend themselves, says Beverly J. Moore, managing director of New York Life Ivestment Management (NYLIM) Retail Markets. But according to a survey released by MainStay Funds, a division of NYLIM LLC, GenXers are actually thrifty, industrious, and financially astute–good prospective clients for financial advisors. Yet advisors don’t target them.

According to the survey, GenXers begin saving early, save often, and expect their standard of retirement living to be better than their parents’. They also estimate that if suddenly unemployed, they could nevertheless financially support their families for 10 months. The sampling in the survey had investable assets of $50,000 or more, with an average annual income of $109,700. They consider themselves financially savvy and their priorities are taking care of their families and retirement planning, in that order (they intend to retire by the age of 59). There are 2.2 million [GenX] households that have an investable net worth of at least $100,000, according to Moore. Total assets of the group are over $700 billion. For advisors, perhaps the most telling finding of the survey: 66% do not have a financial advisor.

Even though they consider themselves financially astute, GenXers figuring on needing an average of $2 million in order to retire comfortably, i.e., better than their parents. Yet according to Moore, the average 30-year-old GenXer who wants to retire at 59 with an annual retirement income of $100,000 in today’s dollars will need, at a 3% inflation rate and an 8% investment return, not $2 million but $7.3 million net of taxes. That means, says Moore, that they need to save about $2,600 a month. Most are saving better than the previous baby boomer generation, she concedes, at 16% of their income. But “they’re not saving enough even to reach the $2 million.”