Generation X Employees Struggle the Most Financially, Most Likely to Dip into Retirement Savings, According to PwC Study

Jun 18, 2013, 11:13 ET from PwC US

NEW YORK, June 18, 2013 /PRNewswire/ -- Generation X employees – those born in the early 1960s to the early 1980s – struggle the most when it comes to juggling competing financial priorities related to their homes, children and parents, reveals PwC US's 2013 Employee Financial Wellness Survey. As a result, more than one-third (36 percent) of Gen X employees think it's likely they will need to dip into their retirement savings to pay for nonretirement expenses, a percentage significantly higher than for both Baby Boomers and Gen Y, the "Millennials." Thirty percent of Gen X employees admit having already withdrawn money held in their retirement plans for expenses other than retirement.

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"Gen X employees are in a unique financial situation. They're often faced with the full spectrum of financial issues – from having to fund children's education to caring for aging parents – while dealing with day-to-day household expenses," says Kent Allison, Partner and National Practice Leader of PwC's Employee Financial Education practice. "These competing financial pressures, along with already depleted equity in their homes, exacerbate America's retirement crisis as employees believe they have no choice but to turn to their retirement savings to focus on short-term needs."

Retirement confidence remains low as employees' concerns grow

Lingering financial challenges continue to weigh down retirement confidence: significantly less than half (35 percent) of employees express confidence they will be able to retire when they desire, reflected in the finding that employees ages 45-54 possessed the lowest retirement confidence over the last three years.


Retirement Confidence by Age, Year over Year




Age 21 to 34




Age 35 to 44




Age 45 to 54




Age 55 to 64




Age 65+




Although overall employee financial stress across generations decreased to 52 percent this year from 61 percent in 2012, financial stress continues to impact employee productivity. Twenty-three percent admit that personal finances have been a distraction at work. Of those, 19 percent say they spend five hours or more at work each week thinking about or dealing with issues related to their personal finances.

"The leakage from retirement plans reemphasizes that employees are facing immediate financial issues that compete with their focus on long-term savings for retirement,"­­­ says Allison. "The impact of this conflict can be seen beyond employees' saving accounts. It becomes a key concern for employers that may see older, less healthy, less productive and more expensive employees working longer, impacting the bottom line and reducing the younger generations' opportunities for advancement."


Employees' Biggest Concerns about Retirement*

            Running out of money


            Healthcare costs


            Not being able to maintain my standard of living


            Health issues


            Not being able to meet my monthly expenses


            I don't know what to do with my free time


            Not leaving any assets upon my death for my family, charity, etc


            Meeting education expenses for child/children


            Managing my investments in retirement




            Other expenses for children (e.g. wedding expenses)


* Respondents could choose up to two answers

Healthcare a greater concern

Healthcare costs rank among the top of employees' retirement concerns, with 38 percent citing it as a concern. The fear of losing healthcare coverage drives an increasing number of people to delay retirement: 29 percent this year, up from 21 percent in 2012.

More than half of the employees (53 percent) with health insurance say they are covered by a high- or mid-deductible healthcare plan, a reflection of the rise of consumer-directed health plans. While employees are concerned about healthcare costs, only 35 percent of those covered by a high or mid-deductible plan contribute to a health savings account (HSA) and of those, only 12 percent indicate that they plan to use the funds as a means to meet future medical expenses in retirement.

Notably, the majority of those closest to retirement age are planning ahead: of the Baby Boomers planning to retire within the next five years before the age of 65, two out of every three employees have a plan for covering their healthcare expenses before becoming eligible for Medicare. Forty-three percent of Baby Boomers are confident they will be able to cover their medical expenses in retirement.

"As life expectancies extend, these concerns will only increase over time," says Allison. "The burden of saving for retirement has shifted to the employee with the rise of defined contribution plans. So it's important for them to understand the benefits of options such as HSAs that allow them to meet current and future healthcare costs. The under-utilization of HSAs is an education issue that we encourage employers to address in their financial wellness programs." 

Despite some improvements, cash flow still a major issue

Cash flow issues continue to top employees' financial concerns, with anxieties about insufficient emergency savings for unexpected expenses (49 percent), delayed retirement (45 percent), and not being able to meet monthly expenses (22 percent) among the top concerns. Additionally, almost half (49 percent) of Gen X  respondents find it difficult to meet their household expenses on time each month, as compared to Baby Boomers (31 percent) and Millennials (30 percent).


Employees' Financial Concerns by Generation

Find it difficult to meet household expenses on time each month

Consistently carry balances on their credit cards

Find it difficult to make their minimum payments on time each month

Baby Boomers

(Age 53 to 70)




Gen X

(Age 32 to 52)





(Age 21 to 31)




"Despite key economic indicators showing signs of improvement, a more sustained recovery is likely required before a significant positive impact occurs for employee financial wellness," says Allison. "People often expect immediate improvements when the market climbs; however, employees' financial situations don't turn on a dime. With employees continuing to experience effects of the economic downturn, employers have an opportunity to drive change to employees' financial behaviors. Recognizing this, more and more companies are implementing holistic and proactive financial wellness programs that help their employees deal with the stresses of competing financial priorities without sacrificing their future, ultimately leading to a more productive and healthy workforce."

About PwC's Employee Financial Wellness Survey and Financial Education practice

PwC's Employee Financial Wellness Survey tracks the financial and retirement wellbeing of working American adults nationwide. It incorporates the views of more than 1,600 full-time employed adults.

Whether your employees are stressed over organizational shifts, market conditions, personal life events, or benefits changes, PwC's Employee Financial Education practice works with clients to design and deliver customized financial wellness programs tailored to employee needs and specific employer objectives. Our goal is to empower employees to make educated decisions to improve their financial wellbeing.

Experience the difference. Visit us online at, email us at or call us at 800-422-5579 to start the conversation.

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