Gen X, Millennials stress over retirement

Survey also finds they expect to get help from family, friends

Those who have the most years to save for retirement appear to be the most worried that when the time comes, they won’t be financially ready.

That’s a key finding from a new report released Tuesday by Bank of America and Merrill Edge.

The survey of more than 1,000 Americans found that among Gen Xers who were still working, 74% were most likely to believe they’ll be financially stressed in retirement based on how they are currently putting money away. Among Millennials, 67% had the same fear.

That’s in contrast to 59% of current retirees who say they aren’t worried about money because of how they saved.

Some of that disparity can be attributed to the younger generations simply fearing the unknown.

“The retirees now know what their costs are in retirement,” says Aron Levine, head of Merrill Edge at Bank of America. “They know what they’re spending in the near term, their health care costs, so it’s a little easier to understand and look out over the next few years vs. Gen X and Millennials who are looking 20 to 25 years out in the future. The unknown, and everything they see and read, suggests a very stressful situation.”

Health care costs are a top worry, regardless of age, with 65% of all those surveyed saying that unexpected medical costs would strain their finances in retirement. A lack of Social Security benefits came in second; 38% of respondents say that would stress their budgets.

“What people do see is that (health care costs) keep going up, and the question ties into longevity,” Levine says. “If you’re a Gen Xer or Millennial you say, ‘I may live a lot longer than previous generations. ... How do I save if I’m going to live into my 90s?’ ”

Apparently, a good number of Millennials believe the answer, in part, is getting money from family and friends. The report found 43% of that age group say they are counting on some financial help from loved ones if they need it in retirement. That may be tied into a belief that they’ll get an inheritance to help tide them over, Levine says.

A better path however, would be to have a savings plan, and many Gen Xers (defined by the study as ages 35 to 49) and Millennials (ages 35-49) are not seeking help from a professional to create one.

The report found 24% of nonretirees are working on retirement goals with an adviser vs. 38% of retirees who did the same before quitting work.

“A lot of Gen Xers and Millennials are not seeking outside help to the degree previous genera- tions did,” Levine say, noting today’s retired seniors “had a plan. They stuck with it, they got help along the way, and now that plan has worked for them for 30 or 40 years.”

Eric Roberge, a certified financial planner whose business caters to Millennials, says that it’s not too late for those who have been straggling with their savings to get on track.

“For Millennials, this is the time to take action around their finances,” he says.

“The unknown, and everything they see and read, suggests a very stressful situation.”

Aron Levine, head of Merrill Edge at Bank of America