Anxiety related to the potential to be financially insecure in retirement permeates the concerns of respondents measured in accordance with their generational and political affiliations. While those identifying as Democrats and Independents register slightly more concern (70% each), a clear majority of Republicans (62%) also said they fear financial instability in their later years, while both Generation X and Millennials feel retirement insecurity more acutely than their Baby Boomer counterparts.
This is according to a survey conducted by the National Institute on Retirement Security (NIRS), released this week and recapped by a key figure in the research in a newly-published column.
“More than two-thirds of Americans (67%) say the nation faces a retirement crisis. And, more than half (56%) are concerned that they won’t be able to achieve a financially secure retirement, says Dan Doonan, executive director of NIRS in a column at Forbes in which he analyzes the results of the organization’s survey. “Americans’ anxiety about retirement is warranted. A wide and growing body of research shows that most Americans face a substantial retirement savings shortfall.”
This includes for people who successfully leverage all of their financial resources, including through the use of a reverse mortgage according to previously published research by the Boston College Center for Retirement Research (CRR) at the beginning of 2021.
Understandably, the effects of the ongoing COVID-19 coronavirus pandemic have only served to exacerbate the insecurity many feel related to their retirement security, Doonan says.
“We asked Americans about the economic fallout from the pandemic on their financial future, and 51% said they are more worried about retirement,” he writes. “Among Americans who have changed or considered changing when they will retire, 67% say that because of COVID-19, they plan to retire later than originally planned.”
The research dove deeply by asking respondents to identify their political party affiliation, and revealed that although the United States is going through a period of intense political polarization between Democrats and Republicans, many Americans stand united in their overarching concern for a secure retirement, Doonan says.
Less united in their collective views about an oncoming retirement crisis are members of different generational cohorts, however.
“A wide swath of Democrats (70%), Independents (70%) and Republicans (62%) agree that the nation faces a retirement crisis,” Doonan writes based on the data. “But while the retirement concern is consistent across party lines, substantial differences emerge across generations. Millennials (72%) and Generation X (59%) are significantly more pessimistic about achieving financial security in retirement as compared to Baby Boomers (43%) and the Silent Generation (26 %).”
This coincides with some pre-pandemic data gathered by the Consumer Financial Protection Bureau (CFPB) one year ago, which said that older generations were generally in a better savings position than younger generations.
As previously detailed by RMD, the oldest members of Generation X will be eligible for Home Equity Conversion Mortgage (HECM) loans beginning in 2023, but some will be eligible for proprietary reverse mortgages as soon as this year, 2021. These facts come with some distinct realities when directly comparing Gen X to their baby boomer parents, particularly when it comes to ways that the reverse mortgage industry can appeal to a new generation when the time is right.