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Retirement Planning > Saving for Retirement

Finances of Gen Xers, Millennials Hit Hardest by Pandemic: Study

By Michael S. Fischer

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What You Need to Know

  • COVID-19 has disproportionately diminished financial security for millennials and Gen Xers, the Society of Actuaries found.
  • Forty-one percent of millennials and 39% of Gen Xers reported negative pandemic-related financial effects., vs. 33% of late baby boomers and 29% of early boomers.
  • And 57% of millennial respondents and 49% of Gen Xers worried about the pandemic's ​effect on their retirement savings.

The pandemic has dented financial security and negatively affected financial well-being for millennials and Generation Xers more than for older generations, recent research from the Society of Actuaries found.

An online survey conducted in January by Greenwald Associates among 2,017 individuals showed that 41% of millennials and 39% of Gen Xers reported at least some negative pandemic-related financial effects. This compared with 33% of late baby boomers (born 1955–1964), 29% of early boomers (1946–1954) and 25% of older individuals.

“Younger generations have faced multiple financial crises early in their careers, between the COVID-19 pandemic and Great Recession,” Cindy Levering, chair of the SOA’s aging and retirement strategic research program, said in a statement. 

“Our research indicates this is negatively impacting their financial well-being, and could ultimately impact their retirement preparedness down the line.” 

The new study builds on a previous SOA report, which found that millennials face greater financial challenges than older generations. The new research indicates that the pandemic may further compound their financial fragility.

Key Concerns

The pandemic does not appear to have significantly increased concern around retirement risks in general, according to the survey results. Yet 57% of millennial respondents and 49% of Gen Xers worried about its effect on their retirement savings, especially around maintaining their standard of living and not having enough money to pay for health care. 

Fewer older respondents expressed these concerns.

Millennials and Gen Xers in the survey were likelier than older respondents to say their feelings of financial security decreased during the pandemic. In addition, millennials indicated that they have shifted their priority to short-term financial goals, with 64% saying they tend to plan financially for less than one year in the future. 

Older generations are more confident in their financial security, including two-thirds of early boomers who said they are on track for a financially secure retirement.

“These findings are particularly worrisome for Millennials, who are focused on short-term issues instead of longer-term goals like preparing for retirement and the risks that could arise,” Levering said. “It may seem far away now, but the earlier you start planning for retirement, the more financially secure you’ll be in the future.”

Forty-eight percent of millennials and 35% of Gen Xers reported that debt is complicating their finances. This compared with 20% of late boomers, 16% of early boomers and 14% of older people.

Forty percent of millennials reported that they had experienced job loss or a pay decrease during the pandemic, compared with 33% of Gen Xers and 21% of late boomers. 

In addition, 35% of workers across generations said they have changed or considered changing when they plan to retire as a result of the pandemic, with most of these respondents delaying their retirement.

Michael S. Fischer

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