“Millennials! It’s all about the Millennials!” seems to be a common theme these days. Yet, many executives look around at their coworkers and realize employees are comprised of an ever-widening range of ages. When you listen closely to all generations in the workplace (i.e., Baby Boomers, Generation Xers, and Millennials), some common themes come through.
According to a 2016 survey by Bank of America Merrill Lynch, more than half of Americans say their financial situation causes them a lot of stress. To make matters worse, half of those also say this stress distracts them from work. Smart companies have found ways to address the financial needs of their workers, while being sensitive to the distinct priorities of each generation.
Here are the most common financial issues by generation and approaches to help meet them:
Millennials: Student Loan Debt
From the moment they start their first job after college, members of the millennial generation have significantly more financial stress than their parents and grandparents simply because of much higher student debt. In 2012, 40% of all 25 year-olds had outstanding student loans, up from only 25% in 2003, according to the Federal Reserve Bank of New York. The average amount owed has nearly doubled since then to $20,326. Organizations with a lot of younger college graduates and in highly educated industries, such as law firms, are starting to offer student loan counseling — a service that helps employees sort through payment and refinancing programs. These programs can often make it easy for employers to offer bonuses or rewards in the form of one-time payments to an employee’s student loan account. While a 401(k) plan is traditionally a desirable benefit to employees, many recently out of college can’t even consider putting money into an investment plan until they get their student debt in order.
Generation Xers: Surprise Medical Bills
Half of Gen X workers say they find it difficult to pay their household bills on time. Additionally, one-third have withdrawn money from retirement savings, most commonly because of unexpected bills, according to a 2017 survey by PriceWaterhouseCoopers (PWC). Families with dependent children have been the most affected by the shift of many companies to consumer-driven health plans (CDHPs). CDHPs offer lower premiums in return for higher deductibles and copays. And, while such high-deductible plans are, generally, meant to be used alongside a health savings account (HSA) to cover routine expenses, many participants find it difficult to set money aside in these accounts.
Another option appealing to Gen X workers with families is insurance that offers supplemental payments to help cover certain out-of-pocket healthcare expenses. Traditionally, hospital indemnity policies simply paid a set amount for each admission and each day spent in the hospital. Responding to the rise of CDHPs, some carriers offer improved policies with benefits for other significant out-of-pocket costs employees now face, including outpatient surgical procedures and diagnostic tests.
Families also have a different reason to consider personal accident policies if they have kids who play team sports. In fact, some policies have added benefits for accidents related to organized sports events. For those families with kids that are very active in sports, an accident plan is probably the coverage they’ll use most after health insurance.
Baby Boomers: Long-Term Care
Not surprisingly, the biggest concern for Baby Boomers is affording retirement. PWC’s survey also found that 43% of Boomers are afraid they will run out of money before they die. Perhaps most frightening is the prospect of paying for a nursing home or other assisted living arrangement. A 2012 survey by the Insured Retirement Institute found that only 16% of Boomers were confident they would be able to afford the long-term care they needed.
Compounding this stress, fewer carriers are offering long-term care insurance and those that do often charge high premiums and have strict underwriting standards. A suitable alternative is life insurance that includes a long-term care rider. This type of life insurance plan accumulates a cash value and a portion of the face amount is available to cover long-term care costs. These plans can be affordable and combine long-term care savings with a death benefit and additional cash accumulation.
As older employees worry about coping with serious health problems, they may be attracted to the security and financial flexibility of critical illness plans. These plans offer lump sum payments that can be used for any expense when the covered employee is diagnosed with certain conditions such as a heart attack, stroke, renal failure, or even cancer. Employees can find it particularly reassuring to know they will have funds available to seek experimental and alternative treatments that would typically not be authorized by traditional health insurance plans.
Meet the Demands of All Generations
Adding these three benefits alone can create a strong foundation that builds a bridge and covers, yet connects, the generational gaps. A Gen Xer might still be paying off a master’s degree. A younger Boomer may have had children later in life, and might feel the need for a personal accident policy to cover their kids’ organized sports injuries. A Millennial might want better out-of-pocket coverage to offset healthcare expenses. The most important takeaway here is to offer a wide variety of coverage that meets your organization’s benefits goals and addresses the desires of today’s talent market.
