How Different Generations Are Managing Their Finances
The recession and subsequent sluggish economy appears to have impacted the generations differently, with the most notable dichotomy among the two youngest adult generations: Millennials and Generation X. Millennials are managing the finances surprisingly well despite having by far the lowest income levels while Gen Xers are having a harder time with debt, making ends meet, and most aspects of overall financial planning.
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Early and late baby boomers with minor children appear to be over-prioritizing college planning at the cost of their own financial security and leaving themselves very vulnerable to major catastrophic events as a result of not taking care of their own needs. Only 16% of early baby boomers and 10% of late baby boomers reported having a long-term care insurance policy even though the average cost of a private room in a nursing home is $90,520 a year according to the 2012 MetLife Market Survey of Long-Term Care Costs, making it one of the most significant threats to financial security in retirement.
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Retirement planning remains the one issue all generations are most vulnerable in, even forearly baby boomers that are on the cusp of normal retirement age. Within thisgroup, 50% have not run a retirement projection, and only 25% know they are on target to retire comfortably. While this isconcerning, even lower numbers for younger generations could pose a greater threat considering that younger employees are less likely to receive full Social Security benefits and more likely to face higher taxes and inflation when they retire.
Links
for more information:
-Press release: http://goff.im/2012-Generational-Research-Press-Release
-Financial Finesse Special Report: Analysis of How Different Generations
Are Managing Their Finances: http://goff.im/2012-Generational-Research