Financial Finesse Special Report: Analysis of How Different Generations Are Managing Their Finances

Over the last few years, our research has documented how U.S. employees have generally emerged from the Great Recession with improvements in their day‐to‐day money management but with a continuing shortfall in their retirement readiness. However, the Great Recession has not left all age groups in the same place. Each generation faces its own unique set of strengths, weaknesses, opportunities, and challenges when it comes to planning for retirement:

  •  Those under 30, commonly labeled the Millennial Generation, are doing a relatively good job managing their current cash flow but need a longer term perspective that makes planning for retirement more of a top priority.
  • 30‐44 year olds, which roughly correspond to Generation X, earn more income than Millennials but have been hit particularly hard by the Great Recession and are now struggling to balance saving for retirement with the immediate needs of raising a family and paying a mortgage.
  • 45‐54 year olds, who are mostly late Baby Boomers, are doing better than Generation Xers with their day‐to‐day money management, and are doing the most in providing for their families through life insurance and college savings, but are largely ignoring hidden threats posed to their own financial wellbeing, such as the cost of long‐term care.
  • Finally, 55‐64 year‐old early Baby Boomers are generally in the strongest financial shape across the board, but must focus more on managing their investment portfolios as they approach the critical distribution phase of their retirement planning.

In this report, we’ll be examining both our primary data and outside research to explore each of these issues in more detail and highlight some future trends to look out for.

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