Inflation weighing on next generation of retirees

Generation X - the next in line to retire - is worried about running out of money, or not having enough to retire at all, according to new research by Natixis Investment Managers.

The research, conducted in collaboration with CoreData Research, found almost half (48%) of Gen Xers have concerns about running out of money in retirement and three in 10 think they will never have enough money to retire.

It found that worries over inflation and debt were primarily shaping Generation X's fears about retirement.

Nearly seven out of 10 (69%) Gen X investors said inflation has hurt their ability to save for retirement, and more than half (55%) reported saving less due to higher everyday costs.

The burden of public debt was also a mounting concern, with three-quarters of Gen Xers (77%) worried it would result in reduced retirement benefits, and 58% believing it would be hard to make ends meet without benefits.

Natixis country head of Australia and New Zealand Louise Watson said Gen X is highly in need of financial advice.

"Gen X are facing a complex set of circumstances that perhaps make them the generation with the greatest need for financial advice in modern times," she said.

"Concerns about inflation, mounting public debt, global geopolitical uncertainty, and domestic issues like the housing and cost-of-living crises have made retirement a daunting prospect for most Australians in this cohort. At the same time, quality financial advice is difficult and expensive to access."

More than half of Gen Xers (56%) said they would need professional advice to achieve their financial planning goals (48%) and specific retirement income planning services (44%).

However, 49% of Gen Xers reported that they preferred digital advice over in-person services, marking a significant increase from 35% five years ago, the research found.

Notably, those turning to digital advice were typically combining it with a relationship with a traditional adviser.

"It's no surprise that Gen X, who are often stressed and time poor as they take care of elderly parents while raising children and navigating demanding jobs, are early adopters of digital advice," Watson said.

"While this technology will help meet some of the demand for financial advice, it can't yet provide anywhere near the level of complexity and personalised advice of a good financial adviser, reinforcing the crucial role advisers still play for Gen X."