Tip of the Week

Generations, Financial Perspectives, and Financial Fragility

The Society of Actuaries has released some additional reports as part of its ongoing research on generational similarities and differences among adult generations in America. Its stated purpose for conducting this ongoing research is “…to understand the similarities and differences across the generations, to learn how younger people may be expected to fare versus those older than them, and to identify areas where further work can be done to find ways to improve the retirement security of Americans.”

The primary report in the 2021 series provides a broad review of the findings in four areas: financial priorities and planning; impact of the COVID‐19 pandemic; retirement savings and planning; and financial support and living arrangements. The most significant topline results reveal that there are differences in many of the financial circumstances and impacts from the pandemic between generations as well as long-standing gender issues. Additional full reports with detailed data by generation as well as race and ethnicity can be found at www.soa.org/research/topics/aging-ret-res-report-list/

It is evident that financial organizations and particularly financial professionals have both a responsibility and an opportunity to assist their clients in assessing their progress in financial planning for retirement among other life events and helping them map out their “wealthspan” needs and capacities as well.

There has been discussion among financial groups about how to work with clients to prepare for and respond to unexpected or unpredictable events. If many of them also face the possibility of a sudden financial emergency, using the insights from the substantial information gathered by these organizations can add to the capacity of financial professionals to meet their responsibility and take advantage of opportunities to serve their clients and communities. Both are pathways to building a more responsive professional practice.