Retirement Readiness: How Gen X and Gen Y Really Picture Their Futures


retirement-dreamsPop quiz! Who’s most worried about retirement: a) baby boomers, b) Gen Xers or c) Millennials?

You’re probably thinking boomers, seeing as their golden years are just around the corner.

But according to a new Merrill Edge survey, Gen Xers actually feel the most angst—74% of them expect to stress over money once they’re retired.

“The financial crisis unnerved people, but particularly younger folks, who didn’t have as much net worth,” says Stacey Decker, a Certified Financial Planner™ (CFP®) and financial solutions adviser at Merrill Edge.

Let’s look at some facts.

According to the U.S. Census Bureau, people between the ages of 35 and 44 lost 59% of their net worth during the last economic downturn, followed by those under 35, who experienced a 37% loss.

Gen X and Gen Y also bore the brunt of recession-triggered unemployment, making up 37% and 40% of jobless workers, respectively, according to a 2013 Georgetown University report—a situation that has put many of them seriously behind on saving for retirement.

“What stresses me out most is the unknown,” says 24-year-old Michelle Hewitt, an advertising account coordinator in Louisville, Ky. “How do I know saving 15% is really going to be enough?”

Decker says that Hewitt’s concerns are valid—and that she isn’t alone in her thinking. “People understand that they can’t necessarily rely on Social Security and a pension [as income sources in retirement anymore],” Decker notes.

In fact, a 2014 TransAmerica survey revealed that more than eight out of 10 Gen Xers and Millennials worry that Social Security will be nonexistent by the time they retire.

There’s also the issue of spiking health care costs—a concern for both generations.

A recent poll by Ameriprise Financial found that 75% of Gen Xers are concerned about rising medical expenses—and 63% anticipate having to shell out big bucks for their own long-term care.

“If the average lifespan is 80 and you plan for that but then end up living until 95, that’s 15 years of possibly being a financial burden on your family,” says Robyn Lytle, a 31-year-old business owner based in Chicago.

With stats like these coming out seemingly on a weekly basis, we decided to take a deep-dive look at the true state of retirement readiness for Gen X and Gen Y—from their distinct nest egg savings habits to their collective dreams for their golden years.

RELATED: How Gen X and Gen Y Do Money Differently

  • Goldberry

    Laurence is a she??

  • Jill

    I may be doing the math all wrong, but I wonder, if for #5, the number is really not too far off for those expecting to inherit assets? If for easy numbers you assume a 100 people, then 29% is 29 people who are expecting to leave assets behind. The average # of children is 1.5-2 per family, which means that those 29 would have a total of between 44-58 children (or 44%-58%) anticipating assets left for them. Which is kind of in the ball park of what the respondents were thinking. I’m not sure they’ll be as surprised as this article thinks they’ll be.

  • Reality Check

    More people are living less pampered lives, I know plenty on SS and a small paid pension that are doing just fine. They don’t and I won’t be taking any exotic trips or touring the U.S. I’m fine reading books and using what is called an imagination, something that seems few have these days unless their smart phones provides it for them. Plus if I make it to 80, which I hope I don’t. Im not going to stress over health care. I’ll face death head on and let it take me. On the kitchen floor. I’m not going to go in and let whatever eat away at me for years and then be shipped off to some ghetto nursing home to share my last days in a room with someone that coughs, moans and hacks up crap all night just so I can live another day for jello and bingo.