Pausing to get back on right road to retirement
Last week, we noted that the retirement glass was half-full, as assets were reported to be at an all-time high. This week, a new report provides more of a half-empty perspective, particularly for the latter part of the Baby Boomer population and for Generation X.
According to the Pew Research study, Retirement Security Across Generations: Are Americans Prepared for their Golden Years?, those Boomers born between 1946 and 1955 are in better financial shape than are Boomers born between 1956 and 1965 (other research uses 1964 as the end date of the Boomer years). Gen X members - that is, those born between 1966 and 1975 - have higher net worth than late Boomers, but both groups trail the early Boomer segment. Early Boomers had more wealth in their 40's and 50's than did late Boomers, but both groups trailed those born between 1936 and 1945 (i.e., war babies) during the same time frame.
The assets of war babies were reported at a level 27 times greater than their debt. By contrast, Baby Boomers were at an asset level 4 times greater than debt. Gen X was the hardest hit by the 2008 recession, with an asset level only 2 times greater than debt. Boomers lost just over a quarter of their net worth during the Great Recession, but Gen X was even harder hit, losing an astonishing 45%. Pew predicts that late Boomers will only be able to replace 60% of preretirement income. For Gen X, the figure is even more worrisome, as this segment will only be able to replace about half of preretirement income. As the study puts it, "Early boomers may be the last cohort on track to retire with enough savings and assets to maintain their financial security through their golden years. "
Blog Author - Ken Felsher
With over 25 years of writing, editing, and research experience. I enjoy sharing with my readers my love of working with content on a variety of subjects.
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