Helping Gen X and millennial clients overcome retirement anxiety
This content is categorized as:It鈥檚 not their parents鈥� retirement. Gen X is the first generation to rely primarily on 401(k) accounts rather than pensions, while Gen Xers and millennials both face student-loan debt, consumer debt, and inflation challenges that impact their ability to save. These financial pressures are compounded by the need to manage current expenses alongside long-term savings goals.
Job insecurity adds another layer of complexity, with studies indicating that many Americans in their 50s and 60s are earlier than planned. All of these factors can create a stressful environment for people trying to plan for retirement.
Dr. Sonya Lutter, PhD, CFP庐, LMFT, a financial psychologist, notes that financial stress is particularly pronounced among these generations. 鈥淎s a whole, Gen Xers and millennials are consistently reporting higher levels of stress, especially pertaining to their personal finances,鈥� she explains.
Financial professionals have a unique opportunity to help address these challenges by building trust, providing tailored guidance, and instilling confidence in their clients鈥� ability to achieve financial security.
Understand their financial priorities
Millennials face competing financial demands that often delay traditional milestones. For example, the has increased to 38, compared to late 20s in 1980. Rising education costs have also left many millennials managing significant debt while attempting to build savings.
Additionally, caregiving responsibilities weigh heavily on these generations. Gen X, with fewer siblings to share responsibilities, often supports both aging parents and children, as highlighted by Pew Research鈥檚 finding that 23% of adults are part of the 鈥�sandwich generation,鈥� with Americans in their 40s the most likely to be part of this group.
Financial professionals can play a crucial role in helping clients balance these priorities. They can also help clients sift through generalized advice they find on the internet or see their peers following. 鈥淲ithout a clear direction of values and strengths, a person can easily get caught up in what others promote as best for them,鈥� Dr. Lutter says. Tailoring financial plans to align with each client鈥檚 values helps ensure the strategies implemented feel relevant and achievable.
Maximizing financial tools
While many clients are familiar with employer-sponsored defined contribution plans such as 401(k)s, they are often less aware of other financial tools. Financial professionals can guide clients in creating a comprehensive plan that optimizes assets across a range of retirement savings vehicles, including annuities, individual retirement accounts (IRAs), and strategies for managing inheritances or other windfalls.
Dr. Lutter also highlights the importance of developing sustainable financial habits. 鈥淎ny progress is good progress,鈥� she explains. Identifying small, actionable steps 鈥� such as allocating 10 minutes daily to financial tasks 鈥� can add up over time and build momentum.
Providing accountability and motivation further enhances client outcomes. By working collaboratively, financial professionals help clients stay focused on their long-term goals without feeling overwhelmed by the complexity of retirement planning.
Develop an ongoing plan and strategy
Economic uncertainty and market volatility have shaped the financial experiences of both Gen Xers and millennials. Establishing an ongoing, adaptable financial plan is essential to addressing these concerns. Dr. Lutter recommends several strategies for building trust and confidence:
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Send information in advance of client meetings. You don鈥檛 need to send everything but consider preparing clients for potential surprises in advance. Let them know you have identified possible solutions, but you wanted them to see the full picture and not be surprised. |
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Use alternative communication methods that are most comfortable for clients. For example, some clients might prefer typing in a chat function or texting versus being called on the phone where a more immediate response is expected. |
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Send written or video summaries of your meetings with action items. If clients momentarily enter a heightened physiological stress state, they will likely not remember what you told them. |
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Limit action items per meeting. People remember best with groups of three. |
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Shorten meetings. The average person experiences a new stressor about every eight minutes they are awake. Keep meetings short to avoid mental drifting. |
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Note your own communication habits. One easy communication strategy: Avoid using the word 鈥渂ut鈥� in your conversations 鈥� particularly for people struggling with regret about their past financial decisions. By replacing 鈥渂ut鈥� with 鈥渁nd,鈥� you acknowledge the past and stay focused on what is within their control. |
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Recognize and applaud small improvements. |
By implementing these practices, financial professionals can create a supportive environment that empowers clients to navigate uncertainties with confidence.
Forging an ongoing partnership anchored in trust
For Gen Xers and millennials, the road to retirement can feel fraught with obstacles 鈥� but it鈥檚 doable with the right tools, empathy and strategies. Financial professionals who understand their clients鈥� unique challenges, provide education on underutilized resources, and foster ongoing engagement can help instill confidence and clarity in these generations. Helping clients pave a path to financial security isn鈥檛 just about the numbers; it鈥檚 about empowering them to move forward with peace of mind.
Learn more ways to help Gen Xers and millennials plan for a remarkable retirement. Get Insights
Insights on 麻豆传媒 Connect. Tips, tools and resources to grow your business by helping clients retire with confidence.
