Interest in Financial Planning increases with age

Our most popular financial education program is our retirement planning workshop geared to employees who are planning to retire in the next 10 years.  Our courses are filled with 50ish group who are getting serious about financial and retirement planning.

The overwhelming feedback we get from these courses is that these courses should be mandatory for all employees, especially the younger ones.  As financial educators and course providers we do not disagree but there is a problem.  The younger employees don’t seem as interested in financial planning.  We certainly hold and offer courses to the younger employees but they are not as well attended as the ones designed for the 50 year olds who just seem to have more interest in financial affairs.

I recently ran across a research report from Sun Life on financial interest and activity in their group plans.  Sun Life is the largest provider of Group RRSPs, Defined Contribution Pensions and Deferred Profit Sharing Plans.  They alone account for more than 30% of the total market.

According to the call center activity, the 50 to 60 year old was the most active group.  In fact they were four times more active than the 20 to 30 year old group.  One rationale for this might be that the 20 something is using the web instead.  However, the patterns in website activity was exactly the same as the patterns in call center activity.   In other words, even older Canadians are very comfortable with the web now.  The results from patterns of call activity and website activity are identical:  Activity is highest for those in their 50’s followed by those in their 40’s and then 30’s, and the least active group is those in their 20’s.

My two cents

This data should not be surprising given that the 20 and 30 year olds have less financial assets to worry about and other priorities.  There just is not as much urgency in financial and retirement planning because it is something (retirement) that is going to happen 20 or 30 years in the future.   Those in their 50’s would have more investment assets and greater urgency to get serious about their finances.

All that being said, we've all heard that financial planning needs to start sooner than later.  All the baby boomers taking my workshops are telling me they wish they took these courses when they were in their 20's and 30's.

One cool thing I do notice is the number of young financial bloggers in their 20's and thirties talking about their financial life.  I really applaud these bloggers for bringing attention to personal finance in their own unique ways.  Here's a few of the ‘young' Canadian bloggers I know about:

Young and Thrifty

Blonde on a Budget

Give me back my five bucks

Twenty Something Money

Here's one last question that is tough to answer . . . How do we get younger people to engage in their financial affairs earlier in life?  What's the magic carrot?

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites JimYih.com and Clearpoint Benefit Solutions.

2 Responses to Interest in Financial Planning increases with age

  1. You know, I think it’s the way boomer parents brought us up. As children we were given what we wanted, never deprived of anything, instant gratification at its finest…

    As adults, this instant gratification attitude still prevails and we are left with an inability to save money, unfortunately.

    Though I must say my parents raised my sisters and I the same way and they are not very financially savvy but I am.. so I guess that throws my theory out the window!

  2. Saving and financial planning were more institutionalized before when folks worked for one company their whole working life and retired with pensions. You had a view into the future because you could see, even when you were in your twenties, someone who was a few steps ahead of you at your company retiring and you pictured yourself in their shoes.

    Maybe because we’ve been told we are special from a young age many young people simply can’t envision life in ten, twenty, or thirty years.

    Perhaps “scared straight” tactics would work to get younger people interested in financial planning. When you see what’s happening to the pensions and retirement plans of people today you might be more inclined to put together a plan.

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