- Less Likely Than Parents to Have a Financial Plan –

- One-Third of GenXers Predict College Costs Will Be Beyond Their Reach -

PARSIPPANY, N.J. – Generation X investors – the 52 million Americans born between 1967 and 1981 – are markedly similar to Baby Boomers (age 37 – 54) and Matures (age 55 – 70) in their savings patterns and attitudes, according to a new national research study released today by New York Life Investment Management LLC (NYLIM).  “The NYLIM Generations Survey” finds that 82 percent of GenXers save regularly for retirement, compared with 83 percent of Boomers and 76 percent of non-retired Matures.  In terms of values, nearly three-quarters (73 percent) of GenXers rank family above career, wealth and leisure, as do 64 percent of Boomers and 52 percent of matures.  Health considerations rank second among all three segments, with 10 percent of GenXers, 25 percent of Boomers and 34 percent of Matures identifying “health” as most important.

After years of skyrocketing college costs, 63 percent of GenXers are saving for their children’s education, compared with 52 percent of Baby Boomers.  Still, due to tuition and fee increases, one-third of GenX investors expect college costs to be beyond reach by the time their children are ready for college, up from 26 percent in 2002.  One-third of Baby Boomers and one-fourth of Matures agree that college costs are getting out of hand. 

“Tuition and fee costs have nearly doubled over the past ten years and, at the current rate of increase, will likely double again in the next ten years,” notes Beverly J. Moore, Managing Director, NYLIM Retail Markets.  “Fortunately, participation in college savings accounts, such as 529 plans, has also increased at a healthy pace.  To keep up with inflation, investors need to factor tuition costs into their comprehensive financial plan and invest consistently.”

Currently, only one-third of GenXers have a comprehensive financial plan, compared with 38 percent of Boomers and 47 percent of Matures.  Twenty-six percent of GenXers invest in 529 Savings Plans, up from 18 percent in 2002.  More than one in ten Baby Boomers (12 percent) and 6 percent of Matures also invests in these plans. 

Among the survey’s other key findings:

• Great Expectations:  While most GenXers plan to foot tuition bills themselves, one in five expect parents or other family members to help finance their child(ren)’s education, up from 17 percent in 2002.  Interestingly, few family members have the same expectation.  According to the study, only 7% of Boomers and 5% of Matures are concerned about saving for their grandchild(ren)’s education.

• Shoring Up Tuition Shortfalls:  Of the three generations, Baby Boomers are most likely to report that, due to market volatility, their children/grandchildren will need to apply for financial aid.  Nearly one-quarter (23 percent) of Boomers indicate that their children/grandchildren will need to seek aid, compared with 10% of Matures and 5% of GenXers.

• Nest Egg Plans:  Because GenXers started saving earlier than the other two segments, they anticipate having a $2 million nest egg upon retirement, double that of Matures ($1 million) and almost twice the size of Boomers ($1.3 million).  However, with a life expectancy of 89 years, a 32-year-old GenX couple will need over $10 million to retire at 60 with the current equivalent of $100,000 in gross income.  This compares with $4.4 million for a Boomer couple age 45 with a life expectancy of 83 years who expect to retire at 64, and $1.1 million for a Mature couple age 62 who have a life expectancy of 78 years and expect to retire at 67, using the same current gross income assumption of $100,000.     

“The NYLIM Generations Survey” was completed in April 2003 and polled 1,529 investors with more than 500 people in each of the survey’s three demographic segments.  Qualified respondents were U.S. citizens between the ages of 22 and 70, with investable assets of at least $50,000.  An independent online research firm conducted the research.

With more than $165 billion in assets under management as of May 31, 2003, New York Life Investment Management and its affiliates provide a wide range of investment services to institutional, individual, corporate, public, and Taft-Hartley clients, including institutional asset management, retail investments, retirement services, guaranteed products, real estate investments, and alternative investments. For more information, visit the New York Life Investment Management website at www.nylim.com .

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