Baby Boomers and Generation X Pessimistic About Retirement
Baby Boomers and Generation Xers feel that less reliable pensions and longer life expectancies make it more likely they will outlive their retirement savings, according to the Allianz Generations Apart Study. 84% of Boomers (adults 49-67) and 92% of Gen Xers (adults 35-48) agree there is a crisis.
The two generations both feel traditional retirement–the dream that you can retire at 65 and live however you want–is no longer realistic. In fact, 84% of respondents in both groups agree traditional retirement is a “romantic fantasy.”
The 2008 crash is what has led to this pessimism. Many respondents indicated they dealt with a post-crash economic disaster, including the value of their homes or 401(k)s decreasing, a family member losing a job or having their savings and/or retirement plans negatively affected. 20% of respondents said they experienced six or more significant events from the crash, and 67% said they changed their view of the market because of the downturn. This changing attitude led 43% of respondents to switch to more conservative investing.
Generation X respondents reported feeling even more hopeless about retirement than Baby Boomers. 67% of Gen Xers believe the financial targets for retirement are out of reach, whereas less than half of Boomers (49%) feel this way.
Part of the reason for this increased negativity may be because Generation Xers are burdened by greater debt. Generation X consumers carry 60% more in mortgage debt, 140% more in student loan debt and 33% more in debt from credit cards than Baby Boomers.
Generation Xers seem complacent about this debt, though. In fact, 20% of Generation Xers believe debt is a fact of life. This attitude has major implications for long-term financial planning. Twice as many Gen Xers as Boomers (27% versus 11%) say they are unsure of whether they will be able to retire.
While over 90% of both generations believe building a strong retirement portfolio is important, neither group is taking action to ensure a financially secure future. 65% of Boomers and 53% of Gen Xers said they “just have this feeling that everything’s going to work out.”
The study was conducted by Allianz Life Insurance Company to determine Baby Boomer and Generation X attitudes towards retirement. 2,000 adults between the ages of 35 to 67, with a minimum household income of $30,000, were interviewed.