A new survey, carried out by the National Institute on Retirement Security (NIRS), has revealed that Millennials and Generation X are more worried about retirement than older generations.
Around 64% of Millennials and 54% of Generation X are more concerned about their retirement security in the wake of the Covid-19 pandemic; compared to 42% for Baby Boomers and 25% for the Silent Generation.
“Generation X and Millennials are the first two generations that largely will enter retirement without a pension, so it’s not surprising that their anxiety is higher,” stated NIRS Executive Director Dan Doonan; and report co-author of NIRS’ Generational Views of Retirement in the United States.
In fact, Generation X (59%) and Millennials (72%) are more concerned than Baby Boomers (43%) and the Silent Generation (26%) about not being able to achieve a financially secure retirement. No wonder Millennials (78%) are substantially more inclined to believe they will have to work past normal retirement age for financial security, with Baby Boomers and Generation Xers right behind at 52%.
Millennials and Generation X are the most pessimistic about their retirement.
Source: NIRS
GENERATIONS PESSIMISTIC ABOUT RETIREMENT
“Millennials and Gen X have lived through multiple economic downturns and decades of stagnant wages. Couple that with longer life spans and rising health and long-term care costs, and it’s easy to understand their pessimism. Going forward, it will be critical for policymakers to find ways to strengthen our retirement infrastructure so these generations can be self-sufficient in their older years,” Doonan added.
The research finds strong support for pensions and Social Security, both of which provide stable and predictable income that lasts through retirement. Most Americans across generational lines see the value of increasing contributions to Social Security; and the highest support for expanding Social Security is among Millennials (at 61%).
Similarly, pensions are viewed favourably by all generations, particularly by Millennials (81%). There is broad agreement that all US workers should have access to a pension to ensure financial independence in retirement.
OTHER KEY FINDINGS
The research also highlighted that:
- Across generations, most of those who are concerned about the impacts of the pandemic plan to delay their retirement.
- There is generational agreement that the US faces a retirement crisis, with Millennials and Generation X most pessimistic about retirement.
- There is broad support across generations for Social Security, including support for increasing contributions and expanding benefits.
- All generations have favourable views of defined benefit pensions, along with wide agreement that pensions are better than 401(k) plans for providing retirement security.
To download the full report, click here.
Only a quarter of Americans are confident that they will be able to fully retire with a comfortable lifestyle, confirmed another recent study. Click here to read more. Another recent US study revealed that nearly one in three older workers plan to work past 70; or actually never retire. Click here to read more.
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