Three Generations, Three Different Retirements

Piggy Bank Savings Female Half Filled
So it seems that boomers and the Generation X that followed them believe a traditional retirement, the kind where you clock out of the job permanently at age 65 to travel, play golf, visit the grandkids or relocate to a sunnier destination, isn't in their future.  Yet Millennials, the oldest among them in their mid 30s, are much more hopeful. They predict they'll retire at or before they reach their mid 60s, according to a survey released Wednesday by the nonprofit TransAmerica Center for Retirement Studies .

Researchers polled 4,143 workers: boomers (born between 1946 and 1964); Gen X (born 1965 to 1978); and Millennials (born 1979 to 1996).

About 65 percent of boomers surveyed say they plan to work after age 65 or don't plan to retire ever. And they're taking steps to try to make sure they remain employed: 65 percent say they're staying healthy to keep working; 41 percent say they're keeping their job skills up to date; 16 percent say they're networking and meeting new people; and 14 percent say they're scoping out the job market and new opportunities.


>> Sign up for the AARP Money newsletter

Earning income and getting health benefits were their top reasons for remaining in the workforce. Some boomers also made contingency plans -- 26 percent say they have a backup strategy for retirement income if they're forced off the job due to health problems or other circumstances.

Catherine Collinson, president of the nonprofit that conducted the study, says older workers who plan to stay on the job  " should do a reality check whether their current employers will support them." Otherwise, she says, "they'll need to seek employment elsewhere or pursue something entrepreneurial."

Gen Xers, who are closer in age to boomers, had similar views about retirement. A majority say they plan to work after age 65 or don't think they'll retire.

Yet the prognosis was quite different for most Millennials: 59 percent say they'll quit working at 65 or perhaps sooner.

A majority of Millennials and Gen Xers agree that the days of a pension-funded retirement are vanishing and that the responsibility for saving adequately for retirement rests on their shoulders. Yet slightly less than half of boomers shared that assessment, presumably because 12 percent said they have a company-funded pension. Only 5 percent of Gen X and 4 percent of Millennials say they have one.

Gen X workers pretty much grew up with  401(k)s as the main vehicle for retirement savings so it's no big surprise that they were most likely to participate in one compared with other generations. Boomers saved at a higher rate, though -- 10 percent versus 8 percent from all workers.

>> Get discounts on financial services with your AARP Member Advantages.

This was a bit frightening and a sign of how little we've saved for our future: 36 percent of boomers and 26 percent of all workers say they expect to live primarily on Social Security benefits in their retirement years. (The average monthly benefit right now is less than $1,300).

To that end, the survey  calculated the median amount  each generation has saved for retirement as of 2014. Boomers had a household retirement savings total of $127,000, Gen X had $70,000 and Millenials had $32,000.

Which brings us to this question: Who believes they have to sock away $1 million or more to fund their golden years? Gen Xers do. Boomers and Millennials say they'll likely need $800,000.

It'll be harder to get there if workers borrow money or take an early withdrawal from a 401(k) plan. Yet that was done most by Gen Xers at 27 percent, followed by boomers with 23 percent and Millennials at 20 percent, according to the survey.

Photo:  Ryasick/iStock

 

Also of Interest

 

See the  AARP home page for deals, savings tips, trivia and more

 

Search AARP Blogs

Related Posts
December 13, 2016 03:31 PM
This is a wonderful time of the year to relax, recharge and refocus before the new year begins. It’s also an ideal time for family and friends to gather to catch up, and for you to reflect and begin to focus on your 2017 goals, particularly as they relate to your career. Whether you’re employed and searching for a new job or unemployed and seeking a job, now is the perfect time to develop your execution plan. Here are a few pointers to help you get focused and stay ahead in your job search.
September 08, 2016 03:31 PM
Are you seeking a career change or a new job? If so, plan to attend  AARP’s Virtual Career Fair, Sept. 20 from 11 a.m. to 4 p.m. ET. The fair will feature employers from across the country.
March 11, 2016 10:58 AM
Are you looking for a new job or considering a career change? Many experienced workers share the sentiment that navigating today’s job market is not as easy as it was perhaps 20 years ago. In the world of social media and job hunting online, it can become even more difficult to navigate the myriad social and professional platforms. It may require you to regroup, get reenergized and rework your job search plan.