Benefit Mix Can Help Financially Stressed Generation X

Family burdens tap savings, affecting health and retirement

Stephen Miller, CEBS By Stephen Miller, CEBS April 10, 2019

For the past two decades, employers have focused on two major trends in the workforce: preparing for the waves of retiring Baby Boomers and creating a dynamic workplace to attract Millennials. Meanwhile, an often-overlooked Generation X feels less financially secure than either Millennials or Baby Boomers, new research shows.

Stressed and Unhappy

MetLife's U.S. Employee Benefit Trends Study 2019, released March 25, found that employees across all ages point to personal finances as their top source of stress, but age is correlated with how much financial stress employees feel.

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MetLife, an employee benefits provider, based its study on October 2018 interviews with 2,500 benefits decision-makers and 2,675 full-time employees.

It's not surprising that, given the financial pressures they're under, fewer Generation X workers than Millennials or Baby Boomers report being happy at work:

  • 68 percent of Generation X, who are ages 38 to 53 and account for a third of the U.S. workforce, said they were happy in their jobs.
  • 75 percent of Millennials (ages 22 to 37) reported being happy at work.
  • 74 percent of Baby Boomers (ages 54 to 68) were happy on the job.

Unhappy Generation X workers "can have significant negative repercussions across the workplace, and employers need to take this seriously," said Todd Katz, executive vice president for group benefits at MetLife. With record-low unemployment and employers competing in a war for talent, "those who can understand their workforce's pain points will be best positioned to both attract and retain experienced, highly skilled workers," he said.

To address the needs of Generation X, employers should look at their benefit offerings, Katz advised, such as financial wellness advice and tools. Eighty percent of all employees want financial wellness programs available to them through work, MetLife found, yet just 20 percent of employers offer this benefit.

[SHRM members-only toolkit: Designing and Managing Flexible Benefits (Cafeteria) Plans]

A Savings Challenge

The average 45-year-old Generation X worker will need to save at least $42,000 annually to retire by age 64 with just under $1 million, according to a new study by Natixis Investment Managers of 1,000 U.S. workers with access to a company-sponsored defined contribution plan.

The cost of daily living is the main obstacle preventing these workers from saving more for retirement, according to the firm's 2019 Defined Contribution Plan Participant Survey, which looks at the three generations active in the workforce. On average, savers contribute 6.8 percent of their annual income to their workplace retirement savings plan, with Baby Boomers contributing at the highest rate (8.5 percent), then Generation X (7.4 percent) and finally Millennials (5.7 percent).

"People have different financial pressures and goals in each stage of life," said Dave Goodsell, executive director of the Natixis Center for Investor Insight, a research affiliate of the investment firm. "It will be crucial for companies looking to attract top talent to tailor wealth and health benefits to meet distinct generational needs."

While access to a retirement savings plan is a necessary first step, advice, education and tools to simplify saving and investing are critical for growing retirement savings, Goodsell added. Sixty-four percent of participants in a workplace savings plan are looking to their employers for more education and guidance, such as when, how and why to invest, he noted.

Teaching employees how to create a budget, follow a financial plan and use a retirement calculator to estimate savings needs are small steps but can make "a big difference in the long run," said Catherine Collison, CEO and president of the nonprofit Transamerica Center for Retirement Studies, which looked at the finances of U.S. workers in its April survey report What Is "Retirement"? Three Generations Prepare for Older Age.


The findings are based on a fourth-quarter 2018 survey of 5,923 full- and part-time workers.


Health Expenses

Far more Generation X workers than Baby Boomers or Millennials are insuring children through an employer health plan, adding to their financial stress, according to Benefits Offerings for a Multigenerational Workforce, a March report from Lockton, an employee benefits and health insurance broker. These findings are based on benchmarking data from 591 employers.

Generation X workers are supporting an average of 2.2 children with an average age of 13, and many will continue to support those dependents until they reach age 26. On the other hand, Baby Boomers "can expect to have dependents off their plan in the near future," if they aren't already off, wrote Ron Leopold, Lockton's chief medical officer, and Janet Moore, the firm's data analytics manager.

In addition, almost as many Generation X workers as Baby Boomers are insuring a spouse on their health plan, and considerably more of them than Millennials are doing so.

  Millennials Generation X Baby Boomers
Average age30.5145.4559.65
Percent insuring spouses28%48%49%
Average age of spouse314357
Percent insuring children31%56%31%
Average age of child51319
Average number of children1.92.21.8

Source: Lockton.

Most employer plans deduct a higher premium from employees' paychecks when they are covering a spouse or partner, and still more is deducted to cover children.


Generation X workers are also more likely than younger employees to have chronic health conditions that are often made worse by stress, such as high blood pressure, diabetes and musculoskeletal disorders, Lockton found. Compared to 26 percent of Millennials, "45 percent of Generation Xers and almost 66 percent of Baby Boomers have one or more chronic conditions, making disease management a significant concern," the report noted.

To address aging workers' health needs, Leopold and Moore recommend benefit offerings that make it easier for workers to take care of their own health, such as telemedicine, wellness programs and onsite clinics.

"Gen X will continue to be a core segment of our workforce for decades to come," Katz said. "By building workplaces that address all employees' needs, employers can build a more loyal and productive workforce."

Related SHRM Articles:

Financial Wellness Perks Expand to Address Employee Needs, SHRM Online, June 2018

How Improving Financial Health Boosts Productivity, SHRM Online, December 2017

Take a Team Approach to Financial Wellness, SHRM Online, October 2017



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