5 Reasons Gen Y Needs Your Financial Advice

How many 20- or 30-somethings have you talked to lately about long-term financial planning?

If your answer is "a few" or "none," it's a perfect time to open a dialogue about the importance of income to financial security and how to protect it. Why? Here are five reasons:

1. Young wage earners value financial security.

The latest MetLife Annual Study of Employee Benefits Trends reveals that 52 percent of working 20-somethings are focused on their long-term financial security. That's not surprising, considering they have come of age during turbulent financial times and are faced with shouldering more of the burden of their own financial security than generations before them. Few will ever see a defined benefit pension plan. Most will foot much of the cost of their benefits. And most will be responsible for making benefit choices that could easily determine their future financial security.

2. Their chances of experiencing a disability are significant.

According to the Social Security Administration, a typical 20 year old has a 1 in 4 chance of experiencing a long-term income-interrupting disability before retirement. Even more eye-opening is this: as of Dec. 2012, there were more than 2.5 million disabled workers in their 20s, 30s, and 40s receiving Social Security Disability Insurance (SSDI) benefits.

3. Most are not prepared to weather the financial impact of disability.

Despite the likelihood of young earners experiencing a disability, the Social Security Administration reports that 69 percent of private sector workers have no private long-term disability insurance. Many who have private income protection may not have enough. In fact, the MetLife study reveals that fully 72 percent are "very concerned" about not having enough money to pay bills during a period of sudden income loss.

4. Younger wage-earning consumers think income protection planning makes sense — while they are young.

A 2011 Council for Disability Awareness (CDA) study reported that nearly 70 percent of employees thought it was important to plan for a potential disability-related loss of income as early as their 20s — or at any age. But despite their lower tolerance for financial risk and their expressed interest in planning, many 20-somethings have not taken the necessary actions to protect their most valuable financial resource — their income. Given the degree to which they are concerned about the risk of income loss, many younger workers are ready to learn how they can protect their income from the financial blow of an unforeseen illness or injury.

5. May is Disability Insurance Awareness Month.

As an advisor, you can ease the pressing financial concerns of younger wage-earning consumers. Help them understand how they can protect their income — and achieve a greater sense of security — with a well-rounded financial plan. A good starting point is helping them understand what they have. And what better opportunity to raise appreciation for the benefits of income protection — and to make sure it's a foundation of their planning — than during Disability Insurance Awareness Month?