A new survey reveals that Millennials and Gen Xers are more likely than Boomers to feel the impact of COVID-19 on certain aspects of their financial health, but most aren’t taking steps to prioritize their wellbeing.
More than half of Millennials (52%) and Gen Xers (57%) report that they have had certain aspects of their health or finances directly impacted by the pandemic, compared to 37% of Boomers, according to the survey by Nationwide Retirement Institute.
For nearly 2 in 5 Millennials and Gen Xers, COVID-19 has already impacted their retirement plans—most commonly in how they are saving in their 401(k) or retirement accounts or changing the risk profile of their portfolio in response to market conditions.
Those who adjusted or plan to adjust their retirement timing due to COVID-19 most commonly say they’ve pushed or plan to push back their retirement date, with more than 4 in 10 (44%) respondents saying so. Moreover, an additional 3 in 10 say they no longer plan to retire due to pandemic related expenses and/or debt, while 1 in 10 say they have moved up or plan to move up their retirement date.
The COVID-19 pandemic has also prompted a quarter of Millennials and Gen Xers to save more money in an emergency fund. Conversely, 1 in 5 Millennials and 1 in 6 Gen Xers have dipped into an emergency fund. Boomers, not surprisingly, are more likely than both to have neither saved more nor dipped into an emergency fund.
Financial Advice
Across all generations—particularly Millennials and Gen Xers—those who have a financial professional say their expectations of them have changed due to COVID-19.
Nearly 8 in 10 Millennials (79%), 7 in 10 Gen Xers (70%), and half of Boomers (52%) who have financial professionals say they are relying on them more than ever due to the impact of the pandemic. In addition, about 1 in 4 Millennials (30%) and Gen Xers (24%) who don’t have a financial professional say they plan to engage one for the first time.
As the role of financial professionals evolves amid COVID-19, Nationwide suggest that it’s crucial to be more engaged with clients and to provide guidance around health care costs in and out of retirement. This is especially important for Millennials, with over a quarter (27%) now expecting their financial professional to provide guidance on near-term health care costs. Among Gen Xers, the most common expectation is to help them adjust their retirement plan, and among Boomers, it’s to provide guidance on market volatility.
Health Care Costs in Retirement
Still, the uncertainty of health care costs in retirement cuts across all generations, but especially Gen Xers, with a majority saying one of their top fears in retirement is their health care costs getting out of control (81% Gen Xers vs. 74% Millennials and 71% Boomers+).
In addition, the average American lacks knowledge about health care costs, with only a third saying they feel knowledgeable about how much they’ll need to cover health care costs in retirement (35% Millennials, 35% Gen Xers, 30% Boomers).
“Health care costs have long been a stressful topic for Americans, and even more so during the COVID-19 pandemic,” says Kristi Rodriguez, leader of the Nationwide Retirement Institute. “In fact, nearly three in four Americans across all generations worry even more now about their family’s health than they did before the pandemic.”
Yet, even though many adults are concerned about health care costs in retirement, many are not having informed discussions with professionals on how to prepare. According to the findings, only 9% of Millennials, 13% of Gen Xers and 11% of Baby Boomers have talked to a financial professional about health care costs in retirement.
Those who work with a financial professional are more likely than those who do not to say they plan to discuss retirement costs (65% vs. 19%) and health care costs in retirement (59% vs. 19%) with one in the future, according to the findings.
“Working with a financial professional and taking advantage of online planning tools can help adults both young and old reach their personal goals,” emphasizes Rodriguez, who adds that talking with a professional can also help “ease anxiety and reduce stress during this uncertain time.”
The online survey was conducted May 7-26, 2020, among 1,940 adults aged 24 and over by The Harris Poll on behalf of The Nationwide Retirement Institute.
