It's no surprise that those who have the most "financial fragility" — that is, vulnerability to a financial crisis and a negative outlook on personal finances — are the younger generations, i.e. millennials and Gen Xers, as well as those who are disabled and have lower education levels.
However, as the Society of Actuaries found in its recent survey, Financial Fragility Across the Generations, there are "distinguishing characteristics" of those deemed financially fragile, and they have specific views about their finances and retirement, information that could help advisors get them better situated for the future.
The study found that one in four millennials and Gen Xers are highly financially fragile, whereas the number for baby boomers and silent generation drops to about one in six. Gender wasn't much of a factor in fragility, with 55% of men and 48% of women at low fragility and 19% of men and 23% of women at high fragility.
The group with the lowest financial fragility were married people, with only 15% measuring highly fragile. Interestingly, those living with a partner were most likely, 33%, to be highly fragile, although 46% of them fell into the low-fragility category, compared with 38% of those single and never married.
Other groups with low fragility included those with college and post-graduate degrees, those retired as well as working for pay, those making $100,000 a year or more, and those with savings and investments of $100,000 or more.
Retirement Concerns
The study found that six in 10 of those with high financial fragility plan paycheck to paycheck, while those with low levels tend to think long term, especially for retirement.
The study also found that priorities differed dramatically according to low and high levels of fragility. Almost all those with high fragility, 92%, stated being able to pay bills was their high or highest priority. Comparatively, 57% of those in the low fragility category said the same.
