Baby boomers may represent the biggest retirement wave in history, but there is a second group barreling down the pipeline right behind their elders: Generation X.
The oldest members of Gen X turn 50 this year, and retirement planning is becoming a bigger focus for this group, the members of which are more reliant upon 401(k) plans for their retirement income than were previous generations.
For financial advisors, this presents an opportunity to help clients make sure that they are taking full advantage of the benefits of 401(k) plans, says Marcy Keckler, vice president of Financial Advice Strategy at Ameriprise.
More than 70% of Gen Xers said that they anticipate that their 401(k)s and individual retirement accounts will be their main sources of income during retirement, according to a new study by Ameriprise.
Just 5% said that they expect a pension to be their main source of income during retirement, the study found.
“They’re taking really good advantage of retirement vehicles like 401(k) plans,” Keckler says.
Advisors should make sure that their clients are getting all of the benefits of a 401(k), she says. For example, some clients might want to make use of catch-up provisions as they enter their 50s. Advisors may also want to take a fresh look at their clients’ allocations, Keckler says.
“Even if a client started [investing for retirement] early they may not have invested as much as they would have liked to,” she says.
Keckler notes that the study showed that Gen X clients who work with advisors reported feeling more confident about their futures and their ability to have the income during retirement that they will need.
“I think one critical thing for advisors to know is the huge impact that they make in their clients lives,” she says.
Gen Xers have some worries about retirement. Almost half those surveyed said that they are concerned that they will have to care for elderly parents during retirement. Nearly a quarter also said they are concerned about supporting adult children.
Almost three-quarters of Gen Xers said they expect to work during retirement, but about 80% said that they expect their future jobs to be less stressful and more personally fulfilling work.
Perhaps not surprisingly, travel tops Gen Xers retirement bucket list. Also high on the list: staying in shape. Ameriprise surveyed 1,518 adults between 35 and 50, who had at least $100,000 in investable assets.