1. Chicago Actuarial Association Meeting – March 26, 2019
SOA Aging and Retirement Research - Perspectives Across the Generations
Chicago Actuarial Association Meeting – March 26, 2019

2. Agenda
Background on SOA Aging and Retirement Strategic Research Program
Overview of Generational Survey Findings

3. SOA Strategic Plan (excerpt)

4. Five Strategic Research Programs
Aging and Retirement – Launched Oct 2018
Actuarial Innovation and Technology – Launching April 2019
Mortality and Longevity
Health Care Cost Trends
Catastrophe and Climate

5. Program Umbrella Aging and Retirement Spans extensive SOA research on:
Retirement Plans
Post Retirement Needs and Risks,
Retirement Plan Mortality Tables,
Long Term Care,
Living to 100 Symposiums
Other aging/retirement issues
Aging and Retirement

6. Aging and Retirement Program Launch
Program Launch highlighted by generational study/media attention
Created a Fact Sheet series on previous studies to further highlight findings for different audiences
New program research completing regularly
Aging and Retirement

7. Launch Survey: Financial Perspectives on Aging and Retirement Across the Generations
October 2018

8. SOA Research on Post Retirement Risks
Long term goal of this research: Understand and improve post- retirement risk management
Many lack adequate assets to maintain living standard in retirement
Decisions will require trade-offs on living standards
Consider multiple stakeholders
Formed Committee on Post Retirement Needs and Risks to oversee this work in 2000

9. SOA Retirement Risk Surveys
Started biennial Retirement Risk Survey series in 2001.
10th survey will be in 2019.
Looks at workers nearing retirement (pre-retirees) and retirees understanding of post-retirement risks and their concerns
Consistent findings – Top concerns for both pre-retirees and retirees are: keeping value of savings and investments up with inflation; paying for adequate healthcare; and paying for long term care or stay in a nursing home
Periodic focus group research supplements the survey
What about generations?

10. SOA Generational survey – Motivation
Prior work primarily focused on near-retirees and retirees (45-80)
Generational survey builds on the prior years’ work
Goal: Understand differences and similarities by generation
Goal: Help improve security and help stakeholders improve their offerings
Goal: Defining and understanding how financial fragility compares across generations

11. Definition of generations
Initial methodological decision – defining and choosing generations
Different sources use varying definitions of Generations
For purposes of survey defined by ages in 2018:
Millennials (ages 20-38), (birthyears: )
Gen Xers (ages 39-53), (birthyears: )
Late Boomers (ages 54-63), (birthyears: )
Early Boomers (ages 64-72), (birthyears: )
Part of Silent Generation (ages 73-83), (birthyears: )
Early and Late Boomers separated: different opportunities through their careers, etc.

12. Methodology Online survey (conducted July 17 - July 27, 2018)
Used Research Now panel
Conducted by Greenwald & Associates for SOA
Sampled 2001 individuals, about 400 per generation
Demographics representative of US population
SOA Review Group (Carol Bogosian, Cindy Levering, Anna Rappaport and Andrea Sellars)

13. Generational inherent differences
Different characteristics: size, education level, labor force characteristics
Born and enter adulthood in different historic, technological and economic circumstances

14. Current Environment and Context
Major shift: DB to DC
Financial literacy challenges
Many Americans: limited access to unbiased financial advice except linked to employee benefits
Big increases over time: college costs, student loans, and housing
Demographic trends: life spans, family structures, number of children

15. Key Results and Areas of Focus

16. A Selection of Survey Areas of Focus
Financial Behaviors and Priorities
Retirement Savings and Planning
Financial Fragility

17. Financial Behaviors and Priorities

18. All generations feel similarly optimistic
All generations feel similarly optimistic. Older generations more in control/satisfied
What are your feelings when you are reviewing your financial situation and looking ahead for planning purpose? Please select as many words below that describe how you feel. Millennials (n=398); Gen X (n=399); Late Boomers (n=403); Early Boomers (n=401); Silent (n=400)

19. Millennials are more likely to be overwhelmed by their financial situation than older generations.

20. Most say affording everyday bills is a priority, Millennials more than others. Saving for retirement is most important to Gen Xers and Late Boomers.
Being able to afford everyday bills
Saving for retirement
Building up an emergency fund
Paying off credit card debts
Saving for medical expenses
Thinking of your current financial situation, how much of a priority is each of the following?
Millennials (n=398); Gen X (n=399); Late Boomers (n=403); Early Boomers (n=401); Silent (n=400)

21. Saving for a home and paying off student loans are higher priorities for Millennials.
Saving for vacations
Saving for long-term care
Saving for buying or upgrading a home
Saving for children’s education
Paying off student loans
Thinking of your current financial situation, how much of a priority is each of the following?
Millennials (n=398); Gen X (n=399); Late Boomers (n=403); Early Boomers (n=401); Silent (n=400)

22. Summary of Other Key Results
Planning for their financial situation varies by generation
Half of Millennials and about 40% of Gen X’ers plan at most 2 to 3 months ahead.
About 25% of the other generations plan at most 2 to 3 months
Only 17% of Millennials plan for 10 years or more and increases by generational age up through 36% for the Silents.

23. Summary of General Takeaways
All generations – General Takeaways
See themselves more as savers than spenders, but older generations say so more
See themselves as thrifty, but older generations say so more
Most individuals consider themselves planners
About half of each generation enjoy managing their finances
Few consider themselves investment pros

24. Retirement Savings & Planning

25. You are on track in planning for a financially secure retirement
Roughly two in three Boomers, those closest to retirement, feel on track in planning for a financially secure retirement.
You are on track in planning for a financially secure retirement
Please indicate the extent to which you agree or disagree with the following statements.
Millennials (n=398); Gen X (n=399); Late Boomers (n=403); Early Boomers (n=401); Silent (n=400)

26. Younger generations are more likely to work for an employer that offers a retirement savings plan.
Does your employer offer a retirement saving plan such as a 401(k) or 403(b) plan, profit sharing plan or other type of retirement savings plan?
[IF EMPLOYED] Millennials (n=280); Gen X (n=285); Late Boomers (n=199); Early Boomers (n=81); Silent (n=28*)
*Caution: Low n-size (11-49)

27. Concern over Inflation in Retirement
How concerned are you about each of the following in retirement?
[IF RETIRED OR RETIRED FROM PREVIOUS CAREER] Late Boomers (n=175); Early Boomers (n=341); Silent (n=366)

28. Millennials, Gen Xers, and Late Boomers anticipate retiring at age 65.
Median Expected Retirement Age
Millennials: 65
Gen X: 65
Late Boomers:
At what age do you expect to retire or begin to retire from your primary occupation?
[IF WORKING AND NOT RETIED] Millennials (n=304); Gen X (n=308); Late Boomers (n=191)

29. Early Boomers and the Silent Generation most often retire between the ages of 60 and 64.
Median Retirement Age
Early Boomers: 62
Silent: 62
How old were you when you retired or began to retire from your primary occupation?
[IF RETIRED OR RETIRED FROM PREVIOUS CAREER] Late Boomers (n=175); Early Boomers (n=341); Silent (n=366)

30. Financial Fragility

31. Financial Fragility Index Methodology
The financial fragility index is defined by assigning and weighting scores to the following characteristics:
Feelings about financial situation and planning
Level of Confidence in making financial decisions
How respondents would cover unexpected expenses
Feelings about being on track for a secure retirement
Based on score, respondent assigned to one of 3 levels of fragility: Low, Moderate, High

32. Financial Fragility by Demographic Groups - Generations
Age

33. Financial Fragility by Demographic Groups - Gender

34. Financial Fragility by Demographic Groups – Other
By marital status: Married least likely to have high fragility (15%).
By employment status: Retired (11%) and Employed (20%) much less likely to have high financial fragility than Unemployed (43%) and Disabled (46%)
High Financial Fragility decreases with greater education, income and savings.

35. Financial Planning Time Frame by Financial Fragility
When you are reviewing your financial situation and looking ahead for planning purposes, what time frame do you tend to consider?
Low Fragility (n=1,150); Moderate Fragility (n=484); High Fragility (n=367)

36. Current Debt Obligations by Financial Fragility
What types of debt do you currently have?
Low Fragility (n=1,150); Moderate Fragility (n=484); High Fragility (n=367)

37. Report Suggestions on Financial Fragility
Useful to recognize differences in planning behavior by fragility level
Financial wellness and education programs should understand the range of differences among financial fragility levels.
Avoid high-cost debt and know how to best use debt
Maintaining an emergency fund can an important tool
Small steps needed to move from shorter to longer range thinking.

38. Another interesting finding – Millennials
Special Report focused on Millennials
All generations believe Millennials have it the hardest.

39. Media Coverage Forbes Money Magazine USA Today Barron’s
Many local newspapers
Trade publications

40. Survey Reports Full report and tabulated questionnaire:
Financial Perspectives on Aging and Retirement Across the Generations
Posted Questionnaire and Results
Six brief reports on specific topics:
Difficulty in Gaining Financial Security for Millennials
Financial Priorities, Behaviors and Influence on Retirement
Family Obligations Across Generations
Financial Risk Concerns and Management Across Generations
Financial Fragility Across the Generations
Family Obligations Across the Generations

41.
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