Are cynical Xers wearing rose-colored glasses?

Posted On May 21, 2013

Just last week we were talking about how 50% of Gen Xers are confident in their retirement savings. Today, we’re hearing that the confidence may not match up with the bank accounts.

The Associated Press reported on the findings of a recent Pew study of the retirement readiness of Boomers and Gen Xers.  While retirees are advised to have enough savings to replace 70% of their income, Gen Xers are on track to replace only 50%.  The report seems to point to the timing of major economic events during the Gen X lifetime – where Boomers largely benefited from the technology and housing bubbles, Xers lost nearly half their net worth in the recent recession.  But I wonder if this delayed savings rate is also the result of the younger generation’s tendency toward delayed adulthood?  And is the same holding true for their Millennial peers?  Maybe not.

It also raises the question — where are Xers going to find that last 20%?  They could retire even later, which may be a logical option on numerous fronts.  They may begin investing more heavily during the post child rearing years when their boomer predecessors were often spending more heavily.  Or they may simply never bridge the gap.

What do you think is the most likely scenario?

Categories: Financial Services, Generations, Recession Economy