A] Prelude
For more information on pension systems, risk and coverage, feel free to visit our dedicated webpages:
https://expatpensionholland.nl/usa-expat-pensions
https://expatpensionholland.nl/global-pillars-systems
https://expatpensionholland.nl/global-investments-risks-0
https://expatpensionholland.nl/global-social-security-coverage
B] The Issue
Retirement is right around the corner for some Gen X investors, but are members of the “sandwich generation” – tasked with caring for both children and aging family members – prepared?
According to a new survey, 20% is unable to save for retirement and 23% have reduced or stopped making retirement contributions entirely. What’s more, one in six are withdrawing from retirement accounts or investments to manage the financial pressures of caring for both their parents and children.
Today’s turbulent economy is weighing heavy on these investors, causing them to feel like they are fighting an uphill battle when it comes to meeting their financial goals for retirement. More than a quarter (26%) feel they will retire later than planned because of inflation and 20% believe they will need at least $2 million in savings to feel comfortable in retirement. However, only 7% report saving that amount, and just 16% have half that amount saved. Alarmingly, 30% said they have less than $100,000.
C] Multiple events
“Gen X investors are carrying the weight of having lived through multiple economic events, from the dot-com bubble crash of 2000 to the 2008 Great Recession. Many of them entered the workforce just as pensions were being phased out, leaving them responsible for building their own retirement savings,” said Craig Hawley, president of Nationwide Annuity. “While navigating these events has made them resilient, now they are supporting both aging parents and children, adding even more financial pressure.
For many Gen Xers who report they are struggling financially, it’s not too late to get back on track – and one of the best ways to do that is to build a long-term plan in partnership with a trusted financial professional.”
D] Value of advice
Gen X investors believe the most important benefit of working with a financial professional is helping them stay focused on long-term goals, according to Nationwide’s survey. While they may be pessimistic about their financial outlook, some are taking proactive, pragmatic steps to prepare, with 60% adjusting their portfolios in response to high inflation and 33% reducing nonessential expenses like vacations and shopping sprees to save more for retirement.
Financial professionals are also attuned to their Gen X clients’ unique financial situations and are developing targeted strategies to help them achieve a stable retirement. According to Nationwide’s survey, advisors are helping Gen Xers find tax deductions and credits, evaluate long-term care insurance for aging parents and prioritize retirement savings over other expenses. Many are also turning to retirement investment vehicles like annuities, with 82% using them to help protect their clients’ assets from market risks.
E] Right time for impact
“Gen X investors are at an age where the financial decisions they make can carry massive implications for their retirement security,” said Hawley. “Partnering with a good financial professional can help them plan for factors like long-term care, taxes and income in retirement, identifying gaps and creating plans to help address them before it’s too late.”
F] Finally
Retirement planning adds value at any age as it goes for tax and cost minimization and return on investment, risk coverage and pay-out flexibility optimization.
The true value of the advisor is to carefully listen to the particular needs of the client and to then present the best possible scenario’s. To empower the client to make the best decision!