Travel Outranks the Kids on Gen X Retirement Planning Priority List
Support for parents ranks (far) below "I haven't thought about retirement expenses yet."
More Generation X workers are thinking about how they’ll pay for airfare and hotels when they retire than about budgeting for the support of their parents or children.
When Prudential Financial organized a recent online survey of 2,000 U.S. workers ages 43 through 48, only 12% of the survey participants said they had factored in the cost of supporting their children. Barely 4% were expecting to support their parents.
Budgeting for fun was more common: 41% had thought about the cost of post-retirement leisure, and 40% had thought about the cost of travel.
Budgeting for support for parents or children ranked below a dazed look: 15% of the participants admitted, “I haven’t thought about retirement expenses yet,”
What It Means
The Gen X workers’ retirement budgeting priorities might seem strange, given that 35% of the participants reported having less than $10,000 in retirement savings, but the survey participants’ thinking does reflect how U.S. retirees live today.
The Transamerica Center for Retirement Studies reported in 2018 that only 13% of the retirees surveyed then were supporting relatives other than their spouses or partners, and about 39% said they were spending their time traveling.
For financial professionals trying to help clients use annuities, cash-value life insurance, mutual funds or other arrangements in retirement planning, the survey results may show much work they have to do to convince Gen X clients that Gen X retirees without defined benefit pension plans or a large amount of home equity might face a different situation than today’s retirees enjoy.
More Prudential Survey Data
Planning: About 62% of the survey participants said they had accounted for health care costs when thinking about retirement expenses, and 44% said they had thought about 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 they will be forced out of their jobs earlier than they want.
Estate planning: 12% hope an inheritance will help them pay for their retirement; 16% hope to leave an inheritance for someone else.
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