Gen-X Not Planning For Retirement
From Marketwatch:
Retirement outlook? Poor
"Generation Xers will be worse off even than the baby boomers when retirement looms unless they make inroads into retirement savings by working longer and saving more, according to a new report."
"The study's authors created a model for the optimal percentage of preretirement income people need, and projected what different household types would actually have, based on the Federal Reserve Board's survey of consumer finances, and other data. The study said retirement households need to produce 73% of preretirement income to meet the standard."
"The study projects that Generation Xers will build wealth at the same rate as earlier generations, but 'what they don't have is the same kind of Social Security benefits coming their way, and they are a cohort relying almost entirely on 401(k) plans rather than having any money from defined-benefit plans,' said Alicia Munnell, co-author of the report and director of the Center for Retirement Research, in a telephone conference."
"Still, the outlook even for older generations is not good."
"Overall, 'a large number of households are at risk,' she said. 'To avoid having a big decline in the standard of living at retirement, they're going to have to do something. The two obvious things to do are to either work longer or save more,' she said.
"While Gen Xers appear to be worse off, they also have a clear means for improving their outlook: Increase savings. Pushing their savings rate just 3% higher would mean that the portion of Generation Xers missing their retirement income target by 10% or more drops to 38% from 49%."
"For the early boomer group, just 32% fall short on retirement income, down from 35% now, if they increase their savings rate by 3%. And 38% of late boomers miss income targets, down from 44% now, if that group ups their savings by 3% a year."
The full paper can be found here:
A NEW NATIONAL RETIREMENT RISK INDEX (PDF)
Retirement outlook? Poor
"Generation Xers will be worse off even than the baby boomers when retirement looms unless they make inroads into retirement savings by working longer and saving more, according to a new report."
"The study's authors created a model for the optimal percentage of preretirement income people need, and projected what different household types would actually have, based on the Federal Reserve Board's survey of consumer finances, and other data. The study said retirement households need to produce 73% of preretirement income to meet the standard."
"The study projects that Generation Xers will build wealth at the same rate as earlier generations, but 'what they don't have is the same kind of Social Security benefits coming their way, and they are a cohort relying almost entirely on 401(k) plans rather than having any money from defined-benefit plans,' said Alicia Munnell, co-author of the report and director of the Center for Retirement Research, in a telephone conference."
"Still, the outlook even for older generations is not good."
"Overall, 'a large number of households are at risk,' she said. 'To avoid having a big decline in the standard of living at retirement, they're going to have to do something. The two obvious things to do are to either work longer or save more,' she said.
"While Gen Xers appear to be worse off, they also have a clear means for improving their outlook: Increase savings. Pushing their savings rate just 3% higher would mean that the portion of Generation Xers missing their retirement income target by 10% or more drops to 38% from 49%."
"For the early boomer group, just 32% fall short on retirement income, down from 35% now, if they increase their savings rate by 3%. And 38% of late boomers miss income targets, down from 44% now, if that group ups their savings by 3% a year."
The full paper can be found here:
A NEW NATIONAL RETIREMENT RISK INDEX (PDF)
28 Comments:
got my welfare check today
im going to AC for the buffet and
a little gambling. at least you can still smoke in the casinos.
escalade,,,, most favored car.
finance the wheels separate from the vehicle.
along with the gold tooth
Calling recent times a replay of the Roaring 20's seems appropriate as well..
grim
I am beginning to think that buying a house in NNJ isn't such a great idea. High property taxes + high home prices = renting the way to go, right?
I am a gen x'er My sisters and brothers range from baby boomers to gen Y ... Large family.. My father was the only one mowing his lawn in our neighborhood and He Drove a reliant K car until he died. I was taught that if you want something you better have the cash for it. No credit cards. Save Save Save. And that there is NO hand outs. Nothing is free and you have to work for it. I was taught that you shouldn't waste money on a depreciating asset such as cars clothes ect. I think it really depends how you were taught financial responsibility not what generation you are from .. I know plenty off Baby boomers and older who are in there 60's who bought the big house/car ect "the dream" and have to work into there 70's to afford to retire or sell the big house so they aren't living in poverty.
All this self-flagalation by Gen. Xers is intriguing; few of my friends are the thoughtless materialists others seem to think characterize us. My wife and I have about six figures locked up in retirement at this point--not enough, but not nothing. We'll nearing forty with two young kids--a drain on both our energy and the money available to waste away. Renters in JC, we are, but own some land upstate, which is almost paid off and, thus, another kind of investment. Doing modestly okay from a long-term perspective. Drive a 98 Subaru too. It's not a bad car, and we take car of it.
how bout this little ditty
from Ever Bank.
"Standard & Poors Says The United
States Credit Rating Could Be Hurt
By Pressure On Budget From Aging
Population ."
S&P went on to say :
"Absent Fiscal Reforms,The US
Credit Rating Would Fall to A
After 2015 and BBB By 2020"
Keep Spending
Baby.
I am post anon 9:42.I am on the young end 29. I have 6 figures saved (in the high 2's and not including 401K)and between my husband and I make 144K a year. We never go out. I do not shop.. I hate it. I am saving for my House in Block Island to retire.. As I said I don't think its a generation thing .. I think it is how you were taught financial responsibility. Most people do not know the first thing about saving or investing.
The most overpriviledged, oversheltered generation which has gotten worse since 09/11 and the inflation of the credit bubble.
Most spend $$$ on Diesel Jeans, Coah purses, abercrombie. Only things that matter are those things that are material.
And many work in retail and act like they have everything in the world.
Of course, the attitude is just to rent, use credit cards & sponge off mommy & daddy in order to spend $$$ on clothes and the best car.
As bad as an addiction to crack cocaine.
I would say 90% of people in NYC fit the above.
its Mommy and Daddy's fault if they let there gen'xer sponge off of them
I hate when today's stay-at-home mothers complain about us working couples driving up the price of things. I try to explain that families in the 1950's had a 900 sq ft home, one simple car, one TV, no cable service, no cell phone, cooked every meal, etc. I also can't believe all the junk people buy their kids today. I don't know what they are teaching them.
They think Diesel Jeans, Abercrombie, the Porche Cheyenne, and Kenneth Cole are the best investment.
Most spend easily between $2,000 - $5,000 a month just on clothes then admit they have $30,000 or more in CC debt.
Send lawyers, guns and money, the sh*t has hit the fan.
Its no different then anyother generation... Please.. Are you going to tell me that your generation was not wanting to buy the latest gadget or thing.. I can remember the excitement over color TV and a Dishwasher.The difference was that older generations saved for it. And as for credit I cannot comment.. My parents never used credit cards. ..I admit somewhere after the boomer generation discipline went out the window along with respect.. Thats is what we should be blasting younger generations about not the spending habits. Those come as a result of the lack of above.
Anonymous said...
I would say 90% of people in NYC fit the above.
11:22 AM
Not a fair comment.
I would say 90% of people [YOU SEE] in NYC fit the above.
There are tons of people busting their butts to make a living. The slackers with inherited wealth are the ones that are visible to the general public.
Previous generations didn't need to buy $300 Jeans and live in a neighborhood based on the trendiness factor.
There were more important things besides XBOX 360 and HDTV.
we are brand new money,from
manhattan and now occupy 15,000
sq.ft. home.
will have a reception for the
blog participants and answer
questions on how to work hard.
Oh come on previous generations did want to live in trendy neighborhoods..They just aren't the same neighborhoods that are today..It may not have been X _box 360 but it could have been a TV..
You are right,, But back then did you need a TV?. Just like now DO you need Sirius..Its all relative.. There is more stuff out there now.. But there was plenty back then that people didn't need.But now things that were were not existent in my parents age are standard base living now washer/dryers, TV, radio..
I think what is different and even more important is increased spending on fixed expenses. I have been unsucessfully trying to find the link (on this blog or another) to a study that showed the % and amount of spending on the fixed expenses of housing, health care, and education. (It was posted in the last 3 months I think)
The study's author found that Americans on average are spending a significantly higher % of their income on home costs, health care, and education than in years past and that these 3 expenses alone contribute more to the savings problem than all other spending.
Andy
It's all the same..
Now = Then
iPod = Walkman
Plasma TV = VCR
XBOX 360 = Atari/Coleco
Satellite TV = Satellite TV (Only the dishes were huge)
Fancy Nikon Digital Camera = Fancy Nikon Film Camera
Expensive Laptop = Commodore 64
Hummer = Conversion Van w/ Bar
grim
Thanks Grim.. Trying to make that point don't think I was clear..
Grim,
I thinking you are comparing 2006 to 1986, and other people were looking further back. I think the spending on excess junk has kept growing the past fifty years. Isn't the average house size triple what it was fifty years ago, yet families are smaller?
"Isn't the average house size triple what it was fifty years ago, yet families are smaller?"
Yeah, but I bet the aggregate weight is the same.
Yech!
Same philosophy though see below
This usage, also put as keep pace, appears in the phrase keeping up with the Joneses, which was coined in 1913 by cartoonist Arthur R. Momand for the title of a series in the New York Globe. It means “trying to match the lifestyle of one's more affluent neighbors or acquaintances.” For example, Their buying a new van is just another attempt to keep up with the Joneses.
For those of you with little retirement savings, don't worry.
The following three pronged financial strategy has always gotten me out of tough spots:
Faith, Hope and Charity!
Hey, you have a great blog here! I'm definitely going to bookmark you!
I have a totally free credit reports site.
Come and check it out if you get time :-)
Greetings.
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