Don't You (Forget About Means): Third Biennial Study on the Retirement Readiness of Generation X
New Study Shows GenXers’ Confidence in a Secure Retirement Lagging IRI Research Finds Few GenXers with Sufficient Savings
– The Insured Retirement Institute (IRI) today released a new report that found only 24 percent of GenXers are highly confident they will have enough money to support themselves throughout retirement. And the lack of confidence may be warranted given GenXers’ current savings levels. Overall more than a third of GenXers have nothing saved for retirement.
While retirement may still be years away, only 8 percent of GenXers have enough saved to support themselves in retirement. Even among the oldest GenXers, those aged 44 to 53, only 11 percent have sufficient savings. To determine if a GenXer has sufficient savings, IRI considered the amount needed for an individual to purchase a deferred income annuity that would generate enough annual retirement income to bridge the gap between the average Social Security benefit and average expenditures for a retiree.
“Pop culture may remember GenXers as the children of the ‘80s seeking independence, yet it may be their quest for financial independence in retirement that becomes their lasting legacy,” IRI President and CEO Cathy Weatherford
said. “GenXers, while still lagging in overall savings, have time on their side. To ensure they can achieve a secure retirement, GenXers will have to exercise diligence in the years ahead by committing to increasing savings and contributing to their retirement plans.”
Key findings from the report: Half of GenXers believe saving for retirement is their top financial concern. Nearly six in 10 GenXers, 58 percent, have not tried to determine how much they need to save for retirement. Among those who have, 34 percent did not factor in health care costs in retirement. Nearly six in 10 GenXers, 58 percent, believe they will retire at age 65 or later. This includes 24 percent who plan to keep working until at least age 70. Nearly two-thirds of GenXers, 65 percent, say they would return to the workforce if they ran out of savings in retirement, and six in 10 say they would attempt to scale back and live only on Social Security. Only one in five GenXers work with a financial professional. But GenXers who do are twice as likely to have at least $100,000 saved for retirement, compared to those who plan on their own. About eight in 10 GenXers describe themselves as being somewhat or not very knowledgeable about investing, and two-thirds rate their financial IQ as being average or low. Two-thirds of GenXers believe it is very important to leave an inheritance to loved ones.
Produced on a biennial basis, this is the third study of GenXers by IRI. The study is based on a survey of 805 Americans aged 34 to 53. The survey was conducted from December 28 to 31, 2015. The margin of error is plus or minus 3.5 percent. Click HERE to access the entire report, or read below.