Craig Hawley on Student Debt, Retirement Risks, and Financial Confidence

**SPEAKER_1** (0:00)
So for more on what this could mean for the average consumer, we're joined by Craig Hawley, the President and Chief Operating Officer at Nationwide Financials. Craig, thanks for joining me today. Now, your research found that roughly 84% of Americans now define the American dream as achieving financial stability rather than just purely building wealth. And so what does this shift really tell you?

**Craig Hawley** (0:20)
Yeah, thanks for having me, and you just nailed the big headline. It's very interesting. We surveyed 2,200 people across demographics, income levels, ages, et cetera, and asked the question of, are you more protection-oriented or are you more wealth accumulation-oriented? And America in general scored at 54, which because of the grain of America, et cetera, I guess that didn't surprise us a lot. But when you look behind those numbers, what is interesting is by generation, the baby boomers scored at 61 Baby boomers are in retirements, so it makes sense that that's their focal point of protecting what they have and making sure they have a dignified retirement. Gen Xers, my generation, actually scored at 52
The real surprise to me was that millennials scored at 50 and Gen Zers scored at 49
And I think about, Gen Zers are my children's age. When I was their age as a Gen Xer, I think I had much more of a wealth accumulation focus. And so I think this is a shift that's going on in our society today and one that makes a lot of sense that we pay attention to in financial services because how we interact with our clients as advisors and partners really does matter. And this is a shift that sort of surprises us a little bit.

**SPEAKER_1** (1:31)
Okay. And I think so many good points about how it's very different amongst different age demographics right now. But encouragingly, 70 percent of Americans do believe that they can improve their financial situation over the next five years. And so what's really fueling that optimism?

**Craig Hawley** (1:46)
Yeah. Well, I think that we're seeing a lot of great statistics around how the American dream has changed. We have 74 percent of people, when surveyed, said they'd like to work with an advisor to put protection strategies in place, while 24 percent of them don't have those, only 24 percent have those strategies. So there's a gap right now between what people are looking for and what they have. We think that's important for advisors to see.
We do think that, as you pointed out, that because the 70 percent statistic around, hey, I believe the next five years will be better for me, is important, because that same 70 percent that said they've cut back recently on their expenditures. And so we're seeing some encouraging signs that while young people, they obviously are more protection focused, they do see a brighter future for themselves.

**SPEAKER_1** (2:35)
Okay, and there does seem to be a gap between right now optimism and preparation. And so why are so many people still confident about their future, but not taking necessarily the steps to protect against income loss or other financial setbacks?

**Craig Hawley** (2:48)
Yeah, I think we've seen some societal changes over the years, right? My parents, the Baby Boomers had pension plans. And so a lot of their basic necessities were met as they moved into retirement, whether it be just basic income or health care. Obviously, they didn't expect to be living as long.
You know, the younger generations now are being asked to fund those requirements themselves. In addition to that, many of them have student loans. And so they're carrying a heavy burden.
There probably are more needs we have in today's world than were needs once upon a time when I was growing up.
In addition to that, I think that we have this kind of what we refer to here as a bag of money issue. And what I mean by that is we go through life, all of us getting a paycheck. And that defines how we spend our money, what we're comfortable doing. And then as we move towards retirement, all of a sudden, if we've done a good job of saving in our 401k plans, et cetera, we're being asked to sort of take a bag of money and figure out how we're going to live on that. Because today, most companies don't have pensions. And separate research has shown that more people today are concerned about running out of money than they are dying. And we know that retirement is going to last longer. And so this gap of how do I deal with this chunk of money that I'm going to have to live on and the anxiety it creates compared to what people want, which is, hey, just provide for my basic necessities. We like to say we buy income for our house, we buy insurance for our house, we buy insurance for our car, for our health. Why not provide insurance for our basic needs? And that's how people are used to living. And there certainly are different strategies that can do that. But when people have the peace of mind that their basic needs are met, that frees them up to live more comfortably. And then whatever money they have left over, they can invest differently for things that they want to do for fun.