Survey highlights financial challenges across generations as longevity increases

A new survey from John Hancock offers a fresh look at the financial challenges facing Americans as they prepare for longer retirements.

Drawing from the firm’s tenth annual survey of US retirement plan participants and a separate panel of retirees, the John Hancock Financial Resilience and Longevity Report offers insights into how Baby Boomers, Gen X, and Gen Z/Millennials are coping with the realities of funding longer post-work lives.

While Baby Boomers were generally in a better financial position than younger groups, 32 percent of Boomers still describe their financial situation as fair or poor. Gen Z and Millennials report even greater challenges, with over half (53 percent) saying they are struggling financially. Overall, 41 percent of US workers rate their financial situation as fair or poor, compared to just 22 percent who describe it as very good or excellent.

“With life expectancy close to 80, Americans must now plan for how they'll live and fund multiple decades of retirement,” Aimee DeCamillo, global head of retirement at Manulife Investment Management, said in a statement.

Retirement preparedness remains a key issue, with half of workers reporting that they are behind on their retirement savings. Only one in three respondents have completed a comprehensive retirement plan, and even among Baby Boomers—who are nearing or entering retirement—two out of five say they are not on track.

The report also exposes a significant gap between workers' expectations and the reality of when they retire. Although many workers plan to delay retirement to stretch out their savings, 62 percent of retirees surveyed said they retired earlier than expected. Nearly three-quarters of early retirees reported significant financial strain  from living longer retirements, with 72 percent wishing they had saved more.

Debt and emergency savings were also major concerns across all generations. Around half of respondents said their level of debt is a problem, and 45 percent are worried about having enough emergency savings. The situation is most severe for Gen Z and Millennials, with many reporting difficulties in balancing current financial needs with saving for retirement. Forty percent of Baby Boomers also expressed concern about their ability to manage debt.

Tellingly, workers who have access to financial advisors or who have formal retirement plans in place report better financial outcomes. Seventy-eight percent of those who work with a financial advisor say they are in a good financial situation, compared to 52 percent of those who do not. Similarly, 45 percent of respondents who work with an advisor say they are on track with their retirement savings, compared to just 26 percent of those without one.

The report also spotlights growing concerns about affording basic living expenses and healthcare in retirement. Nearly half of US workers are worried about being able to cover these costs, with Gen Z and Millennials showing increased levels of anxiety compared to last year. Gen Xers and Millennials are more likely than Boomers to report that managing current financial priorities is hindering their ability to save for retirement.

While 60 percent of US workers prioritize saving for retirement, the study indicates that financial management challenges continue to prevent many from setting aside enough money. Two in five workers said they would be saving more if they could better manage their everyday finances – a challenge that's particularly prevalent among younger generations.