All Three Generations Need Income Protection

shutterstock_1032426208The top three workforce generations are Baby Boomers, Generation Xers and Millennials. These generations range from being born in 1946–1996, which is a 50-year difference from the first Baby Boomer to the last Millennial. Even with the large age gap, all of these individuals have a very similar concern—the loss of income if they are unable to work due to a disabling event such as an injury or illness. 

These groups have diverse values due to the different stages they are at in their lives and also how the media influences them. Knowing what is important to each generation can help understand the importance of having income protection (also known as disability insurance) in place. 

In addition, most employer provided plans do not adequately protect the income of their employees. Helping individuals understand the importance of these plans will prepare them to make better financial decisions.  

Born between 1981-1996 
95 million 

Millennials’ careers had a slow kick start due to the 2008 recession. Post-recession Millennials are more stable and are starting to advance in their careers while taking on more adult-type responsibilities. Advancing careers means greater salary and greater loss of income if a disabling event were to happen. This is an important time to emphasize the need for disability insurance. 

Millennial’s value experiences, travelling and living the way they want. Also, this group is focused on paying off student loans and starting to save for weddings and homes. Understanding that income protection is vital to their long-term financial viability is central to their making the right decision to protect income.     

These individuals spend double the time than non-millennials on social media and online video services. Facebook, Snapchat, Instagram, Twitter and YouTube are the social media platforms that Millennials use the most. Validation from these sources is important in a millennial’s decisions. 

Generation Xers 
Born between 1965-1980   
82 million 

The average Generation Xer is raising a family, taking care of aging parents and has about $142,000 in debt due to student loans. Without adequate income protection, even a relatively short income stoppage due to illness or injury may irreparably derail their finances. 

These individuals still use traditional print media, but they also like to incorporate online usage into their lives. This group favors blogs and spends an average of seven hours a week on Facebook. They like to research online, but they still prefer to do transactions in person.  

Baby Boomers 
Born between 1946-1964 
76 million  

Asking this age group what would happen if for some reason they couldn’t work and had to dig into their retirement funds helps them understand the need for income protection. Early use of funds dedicated to retirement will have a drastic impact on their future plans as the time horizon to replace those funds is so short. This age group is also more prone to both accidents and illnesses, so they realize the impact unexpected health concerns may have on their future.

Baby Boomers may have new debt related to helping their children financially, including paying off their student debt. Or they may have gone back to school themselves to obtain a higher degree.  

Baby Boomers prefer to do transactions in person, but they also incorporate digital or mobile options into their daily lives. More than 82% use social media, and the majority of that 82% are using Facebook exclusively.

Getting to know more about these group differences helps us all understand the value and importance of income protection for all ages.  

If you would like to have a more in-depth discussion on the different types of income protection strategies, please contact your local UBA Partner Firm. 

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