Lost in Translation. Retirement lessons learned by the Sandwich generations are not getting passed on. Lost in Translation 27102D PRT 02-18

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1 Lost in Translation Retirement lessons learned by the Sandwich generations are not getting passed on. Page 1

2 Retirement planning has not been a topic of conversation between parents and kids Lost in Translation Whether it s don t touch the stove! or look both ways before crossing the street, we lean on our parents for guidance from an early age. Most often, their advice is based on lessons learned the hard way. When it comes to finances, however, conversation seems to be sorely lacking. Parents in the Baby Boomer (ages 51-69) and Gen X (ages 36-50) generations collectively known as the Sandwich generations aren t exactly passing along what they ve learned to their kids. That s one of the big lessons learned in the 2017 Midland National Life Insurance Company Baby Boomer and Generation X Retirement Study. Key Learning 1: Parents are concerned Baby Boomers and Gen Xers give themselves low grades regarding their own retirement planning, with 63% grading themselves C or lower. Most believe they should be saving more. Financial security in retirement is a prevalent worry, with 65% stating having enough money is their biggest concern. There appears to be real reason to worry; over a third of those polled (3) have saved less than $25,000, while about 22% have saved nothing. What are you most concerned about regarding your retirement? Having enough money/ financial security 65% Healthcare costs/ insurance Health concerns Other Nothing/don t know 11% 25% Which grade would you give yourself regarding your retirement planning? 15% D 18% F 30% C 2 B A Which of the following best describes how you feel about how much you save each month for retirement? I wish I was saving more I am saving the right amount I am saving too much Don t know/not sure 1% How much money have you saved for retirement? Nothing $1 to $4,999 $5,000 to $24,999 8% 11% 20% Total 22% Gen X 66% 26% $25,000 to $99,999 $100,000 to $499,999 13% 12% 14% Baby Boomers 23% $500, % I do not know 6% 8% Page 2

3 Key Learning 2: Financial lessons learned are not lessons shared The main barriers to putting away more funds for retirement were not making enough money and too many other expenses - almost two-thirds of the total responses. Over half responded paying off debt as a priority over retirement savings. The Sandwich generations are obviously feeling the pressure to prepare for their approaching retirement. Unfortunately, these worries have not prompted serious discussions regarding retirement finances for younger generations. Right now, children of Gen Xers have time to get their savings on track. This is the best time to provide financial guidance, but the majority of those polled don t feel comfortable discussing this topic with their kids. Just two in five Baby Boomers and a slim majority of Gen Xers report ever having given advice to their kids on planning for retirement. What s the biggest financial mistake you made when you were young? Spent money on things I didn t need Didn t save for retirement % 33% 35% 44% What s the biggest financial mistake you made when you were young? 35 % Spent money on things I didn t need 28 % Didn t save for retirement 22 % Got into too much debt Got into too much debt 18% 22% 28% Something else 15% 1 Total Gen X Baby Boomers Thinking about your budget, which of these do you prioritize over putting more toward your retirement? Which of the following is the biggest impediment to you putting away more money for your retirement? Paying off debt 51 % 50 % 51 % I don t make enough money 34 % 32 % 35 % College saving for kids 6 % 15 % 28 % I have too many other expenses/am paying off debt or loans 25 % 28 % 33 % Buying a car or house 15 % 20 % 28 % I am saving as much as my company allows through my employee contributions 11 % 13 % 16 % Travel 10 % 14 % 20 % I don t need to save for retirement right now 9 % 7 % 9 % Entertainment 7 % 11 % 16 % Something else 17 % 12 % 21 % None of these 25 % 15 % 32 % Page 3

4 Key Learning 3: Disconnected advice The data shows that overspending and debt accumulation are reportedly the primary obstacles against saving more for retirement. However, the financial advice parents are giving their kids consists primarily of platitudes such as save as much as you can and save early. Only 12% of respondents advised their children to avoid unnecessary debt, despite the majority of the Sandwich generation respondents struggles with it. Consider this another opportunity to pass along some focused, actionable information to your clients. What is the top piece of financial advice you gave your children? 48 % Have you ever given your children advice about planning for retirement? *parents only 34 % Gen X 53 % No 47 % Yes Baby Boomers 13 % 12 % 10 % 4 % 6 % 18 % 2 % 60 % Yes 40 % No Save/save as much as you can Start saving early/ while you re young Contribute to a savings plan (401k, 403(b), IRA) Spend wisely/ avoid debt Make saving a routine Make investments Have an emergency fund you don t touch Other Nothing/ don t know Page 4

5 Methodology The online survey was fielded via Toluna s online respondent panel and platform from March 29-April 3, The sample included 600 United States adults between the ages of 36 and 69. Questions covered topics related to retirement, such as concerns, preparedness, confidence in Social Security and savings, and barriers to greater retirement savings. Data weighted by gender, race, ethnicity, and region to be representative of the national adult audience aged Analysis is for educational purposes only. The experience of the participants of the 2017 Midland National Baby Boomer and Generation X Retirement Study may not be representative of the experience of all clients. Insurance products are issued by Midland National Life Insurance Company (West Des Moines, IA). Sammons Institutional Group SM, Inc. provides administrative services. Sammons Financial Network LLC, Midland National Life Insurance Company, Sammons Institutional Group SM, Inc. and Midland Retirement Distributors SM (a division of Sammons Institutional Group) are wholly owned subsidiaries of Sammons Financial Group, Inc. Midland Retirement Distributors SM Sales Desk: (833) Online: Page 5