Retirement Readiness by Generation

[Tekward]

A mildly interesting study. Many of the findings are familiar, but also:

"As for the report's more unexpected findings, the biggest would be that younger generations appear to be in a better position than older ones, the research finds. Despite the pervasive storyline that millennials will never be able to afford to retire, Morningstar reports that 47% of Gen Xers and 52% of baby boomers may experience retirement shortfalls, compared with 37% for Gen Z and 44% for millennials."

Half of boomers and Gen X are poised to run out of money in retirement—but millennials are in a better spot, says report

Overall, 45% of American households are projected to run short on money in retirement.

finance.yahoo.com

So you don't have to look it up, like me
The breakdown by age looks like this:

• Baby Boomers: Baby boomers were born between 1946 and 1964. They're currently between 57-75 years old (71.6 million in the U.S.)
• Gen X: Gen X was born between 1965 and 1979/80 and is currently between 41-56 years old (65.2 million people in the U.S.)
• Gen Y: Gen Y, or Millennials, were born between 1981 and 1994/6. They are currently between 25 and 40 years old (72.1 million in the U.S.)
• Gen Z: Gen Z is the newest generation, born between 1997 and 2012. They are currently between 9 and 24 years old (nearly 68 million in the U.S.)
• Gen A: Generation Alpha starts with children born in 2012 and will continue at least through 2025, maybe later (approximately 48 million people in the U.S.)

 

[Tekward]

My DW and I are Boomers and 3 daughters are Gen Y, but also serving towards a military pension.

My biggest adjustment in retirement is that all kids have launched and independent. That was a best case assumption.

 

[Koolau]

Interesting study. I'm surprised that the younger generations are doing better than we (DW's an my generation - the boomers) are. Good for them. Maybe they've been reading our FIRE Forums!

 

[Luvtoride]

A mildly interesting study. Many of the findings are familiar, but also:

"As for the report's more unexpected findings, the biggest would be that younger generations appear to be in a better position than older ones, the research finds. Despite the pervasive storyline that millennials will never be able to afford to retire, Morningstar reports that 47% of Gen Xers and 52% of baby boomers may experience retirement shortfalls, compared with 37% for Gen Z and 44% for millennials."

Half of boomers and Gen X are poised to run out of money in retirement—but millennials are in a better spot, says report

Overall, 45% of American households are projected to run short on money in retirement.

finance.yahoo.com

So you don't have to look it up, like me
The breakdown by age looks like this:

• Baby Boomers: Baby boomers were born between 1946 and 1964. They're currently between 57-75 years old (71.6 million in the U.S.)
• Gen X: Gen X was born between 1965 and 1979/80 and is currently between 41-56 years old (65.2 million people in the U.S.)
• Gen Y: Gen Y, or Millennials, were born between 1981 and 1994/6. They are currently between 25 and 40 years old (72.1 million in the U.S.)
• Gen Z: Gen Z is the newest generation, born between 1997 and 2012. They are currently between 9 and 24 years old (nearly 68 million in the U.S.)
• Gen A: Generation Alpha starts with children born in 2012 and will continue at least through 2025, maybe later (approximately 48 million people in the U.S.)

LOL I recently looked up those categories and years of birth myself. It gets kinda confusing when the media uses those terms as if they are 2nd nature to all audiences.

 

[Lorenzo]

Interesting study. I'm surprised that the younger generations are doing better than we (DW's an my generation - the boomers) are. Good for them. Maybe they've been reading our FIRE Forums!

If they're not reading FIRE forums then they are likely reading at least general saving-for-retirement advice. I'm a tail-end Boomer, and I wish I had gotten the kind of advice discussed here and on Bogleheads back in the '80s. When the Internet got going, I didn't look for online forums of any kind, let alone seek financial advice and information online. My thinking was that random people on the Internet surely have no idea what they're talking about. ( I've softened a bit on that ) In contrast, Gen-X/Y/Z have grown up with the Internet and don't give a second throught to diving into online forums and publications.

 

[Koolau]

If they're not reading FIRE forums then they are likely reading at least general saving-for-retirement advice. I'm a tail-end Boomer, and I wish I had gotten the kind of advice discussed here and on Bogleheads back in the '80s. When the Internet got going, I didn't look for online forums of any kind, let alone seek financial advice and information online. My thinking was that random people on the Internet surely have no idea what they're talking about. ( I've softened a bit on that ) In contrast, Gen-X/Y/Z have grown up with the Internet and don't give a second throught to diving into online forums and publications.

That's a good point. The internet has made it much easier to get info on FIRE - that's how I found this site by searching for (IIRC) "early retirement." With all its faults, the internet is a net positive for FIRE as the info is readily available. Sites like this one and Bogleheads and Scott Burns really helped me a lot. I started late (as an early Boomer) but I think I've made up for lost time - with some help!

 

[Texas Proud]

I think another cause is that the death of pensions have been all over the news... along with SS going broke...

I taught my kids that they need to think about retirement when they were in high school... showed them what they should do and have helped them along... I do not know what DS is doing as I do not ask... but DD is still in college and I match $1 for $1 everything she puts in a ROTH so she put in almost her whole salary for the year (which is VERY small as she does not work much...)...

 

[The Cosmic Avenger]

LOL I recently looked up those categories and years of birth myself. It gets kinda confusing when the media uses those terms as if they are 2nd nature to all audiences.

It's also confusing that the definitions seem to be 3 years old, as the ages are all 3 years too low!

 

[Texas Proud]

Also remember that 401(k)s were not a thing way back when...

My first job out of college did not have one for the first couple of years... and then only matched 25% up to 4%... and IIRC you could not save much anyhow... I never did put any money aside there...

My 2nd job (a few years later) had a great one... match dollar for dollar up to 12%... I maxed out my saving and in fact went over... got a refund check a couple of years later... I was shocked that there were at least half of the people I knew did not even put any money aside..

 

[Koolau]

Also remember that 401(k)s were not a thing way back when...

My first job out of college did not have one for the first couple of years... and then only matched 25% up to 4%... and IIRC you could not save much anyhow... I never did put any money aside there...

My 2nd job (a few years later) had a great one... match dollar for dollar up to 12%... I maxed out my saving and in fact went over... got a refund check a couple of years later... I was shocked that there were at least half of the people I knew did not even put any money aside..

Yeah I remember some of my lab mates who thought the "new fangled" 401(k) was some kind of a scam. (Say WHAT?) Anyway, there were lots of folks who didn't get into the 401(k) when we were first eligible. I now call these people "Long Service Empl*yees."

 

[Andre1969]

Why do they keep shrinking the Gen-X cohort? For ages, it seemed like it covered the years 1965-83. Around the time of the Great Recession, they started shifting it, and throwing some of the younger Gen-Xers into the Millennial cohort. I was always convinced they did that so that people could start writing articles about how the Great Recession was hurting Millennials in the workforce. If they used the time-honored ranges, the oldest Millennials would have only been 25 when the Great Recession hit. The vast majority of them were still in college, high school, or even still little kids! So there just weren't enough sob stories to pull from. So, the solution, move some Gen-Xers to the Millennial cohort, and voila! Problem fixed!

Still, regardless of whatever endpoints you use, it's interesting that the Millennials are doing better than Gen-X or the Boomers. I figured the Boomers, for the most part, would be set, but Gen-X would be strapped, because they were less likely to have pensions, more likely to job-hop, etc, and that it would be even worse for Millennials.

 

[Koolau]

Why do they keep shrinking the Gen-X cohort?

Yeah, I always wondered how they determined what year range made up a generation. From the post describing the various generations, the number of years seems a bit "flexible." I always thought the definition of "generation" was 20 years, but what do I know?

 

[happy2bretired]

I hope I do this right. Business Insider has a new story out today about Gen Z women that are financial influencers. It’s an Apple News article that I hope I can post here correctly and you can read. Very insightful article about the younger generation of women and how they are preparing themselves and their outlook on their financial education.

Gen Z women are getting into personal finance tips to invest and save — Business Insider

The finance guru Dave Ramsey famously said that if Americans wanted to build wealth, they should give up their morning coffee. But spend any time in certain corners of personal-finance Instagram and TikTok and you'll see women indulging in sleek caffeinated beverages.

apple.news

 

[Koolau]

^^^^^^^^

Too long for me this early in the (my) morning. Can you bottom line the conclusions for us, please?

 

[happy2bretired]

This article is rather long.

“Nearly all the financial-education content geared toward women focused on home-economics fare like saving and budgeting, she said. Meanwhile, the content she actually needed, which explained the fundamentals of investing, not only was "very dry" but seemed primarily made with a male audience in mind. "I couldn't really find anyone who was teaching money the way that I wanted to learn it," Sacks said. "So I became her." Now, six years later, Sacks, who goes by Mrs. Dow Jones on social media, has 1 million followers on Instagram, where she posts”

Hope I was ok in just doing it that way.

 

[Car-Guy]

Also remember that 401(k)s were not a thing way back when...

My first job out of college did not have one for the first couple of years... and then only matched 25% up to 4%... and IIRC you could not save much anyhow... I never did put any money aside there...

My 2nd job (a few years later) had a great one... match dollar for dollar up to 12%... I maxed out my saving and in fact went over... got a refund check a couple of years later... I was shocked that there were at least half of the people I knew did not even put any money aside..

I never understood folks that didn't take full advantage of a "matching 401k" when available. The tax deferral was enough for me to use it but the 100% + matching was a no brainier in my case. Heck, from my POV it was fee money.

 

[happy2bretired]

This article is rather long.

“Nearly all the financial-education content geared toward women focused on home-economics fare like saving and budgeting, she said. Meanwhile, the content she actually needed, which explained the fundamentals of investing, not only was "very dry" but seemed primarily made with a male audience in mind. "I couldn't really find anyone who was teaching money the way that I wanted to learn it," Sacks said. "So I became her." Now, six years later, Sacks, who goes by Mrs. Dow Jones on social media, has 1 million followers on Instagram, where she posts”

Hope I was ok in just doing it that way.

Here’s her website. A younger way of educating young women.

About

www.mrsdowjones.com

 

[Diogenes]

We should note, that articles of this ilk, are almost invariably about retirement at the canonical age... which these days, is around 65-67. Barring some calamity, yes, SS will be around, and today's workers will continue to be more fervently dedicated to their 401Ks, than folks 30+ years ago. OK, good... but, this says nothing about early retirement!

In other words, Bobby the plumber, who started plumbing back in 1967 at the tender age of 18, might very well be able to retire in the early 2000s, in his mid-50s... assuming that he followed FIRE principles, living a modest and tempered life. Bobby's son, might arguably not be so lucky. Bobby Junior will still retire - eventually. Let's not smear Bobby's predicament by dubbing it a "crisis". But Jr., born in 1971, might have to persevere in the workforce, some years longer. Then there's Bobby's grandson. Bobby III will probably still have SS and so on, but what of his own FIRE prospects? Do we have any reliable forecasting on that?

 

[Koolau]

We should note, that articles of this ilk, are almost invariably about retirement at the canonical age... which these days, is around 65-67. Barring some calamity, yes, SS will be around, and today's workers will continue to be more fervently dedicated to their 401Ks, than folks 30+ years ago. OK, good... but, this says nothing about early retirement!

In other words, Bobby the plumber, who started plumbing back in 1967 at the tender age of 18, might very well be able to retire in the early 2000s, in his mid-50s... assuming that he followed FIRE principles, living a modest and tempered life. Bobby's son, might arguably not be so lucky. Bobby Junior will still retire - eventually. Let's not smear Bobby's predicament by dubbing it a "crisis". But Jr., born in 1971, might have to persevere in the workforce, some years longer. Then there's Bobby's grandson. Bobby III will probably still have SS and so on, but what of his own FIRE prospects? Do we have any reliable forecasting on that?

It's difficult to guess what will happen going forward. Things are changing rapidly (from AI to politics.) What our kids and their kids will face is a total unknown for us. I hope it will be okay for them. I'm doing what I can now to smooth the way with some financial help as they need it. YMMV

 

[happy2bretired]

My DW and I are Boomers and 3 daughters are Gen Y, but also serving towards a military pension.

My biggest adjustment in retirement is that all kids have launched and independent. That was a best case assumption.

My daughter is a Y too and I’m a Boomer. She and her husband are doing very well right now. They bought a foreclosed house around 2012 I think. Anyway they paid very little for the house, fixed it up (I helped) then sold it in 2020 just as real estate began booming. They got a very good price for the house and immediately bought another larger house before the interest rates went up. I’m very proud of them.