Most Gen Y Workers Lack Financial Safety Net
MetLife’s 10th Annual Study of Employee Benefits Trends has revealed that upwards of two out of every three employees aged 21 to 31 are distressed about their financial security if unable to work due to illness or injury. What’s more, almost half of Gen Y workers report that they are only one paycheck away from living in poverty. Compounding this issue is the fact that only about half of workers within this demographic say that they have disability insurance.
“A disability is not selective – it can happen to anyone, at any time. If you have people who depend on your income — or if you depend on your income — you need disability insurance. MetLife research finds that Gen Y workers are shouldering significant familial responsibilities: 55% say they are married or in a domestic partnership, 46% are parents of young children, and 13% provide care for an elderly parent or relative,” said Clea Barth, vice president, Individual Disability Insurance for MetLife. “These obligations underscore the importance of understanding how disability insurance can help build a financial safety net so that essential expenses could still be paid if the breadwinner is unable to work due to illness or injury.”
Even among those young workers who have disability benefits coverage, 40 percent are unsure as to whether or not that coverage is adequate. This is particularly troubling because recent data from the 2012 Social Security Fact Sheet indicate that nearly a quarter of workers currently 20 years old will be disabled by the age of 67. While MetLife generally recommends obtaining enough disability coverage to protect between 60 and 80 percent of after-tax income, about half of Gen Y workers stated that they spend at least 70 percent of their monthly income on necessary expenditures, and 25 percent spending at least 80 percent.