New York, NY (December 13, 2023) According to the Schroders 2023 U.S. Retirement Survey, non-retired Americans between the ages 43 and 58 (Generation X) say on average it will take $1,112,183 in savings to retire comfortably, yet they expect to have just $661,013 saved. The resulting savings gap of $451,170 tops the expected shortfall facing Millennials and Baby Boomers.
Millennials (ages 27-42) believe they will need $1,280,892 to retire comfortably and expect to have $877,266 saved, leaving a savings gap of $403,626. Non-retired Baby Boomers (ages 59-77), believe it takes $924,897 to retire comfortably, which exceeds the amount expected to be saved ($633,401) by $291,496.
Notably, 61% of non-retired Gen Xers are not confident in their ability to achieve a dream retirement compared to 49% of Millennials and 53% of non-retired Baby Boomers.
Further, 45% of non-retired Gen Xers say they have not done any retirement planning, compared to 43% of Millennials and 30% of non-retired Baby Boomers.
“The size of the retirement savings gap facing Gen X is concerning, as they are the first generation to rely on 401k plans instead of pensions and the next in line to retire,” said Deb Boyden, Head of U.S. Defined Contribution at Schroders. “Fortunately, even the oldest Gen Xers have some time before reaching their full retirement age. Using this time to develop a retirement plan and increase their savings rate is crucial to improving their retirement readiness before it’s too late.”
Underscoring the need for a plan, non-retired Gen Xers are allocating on average 32% of their assets earmarked for retirement to cash despite their time horizon and sizeable retirement saving gap. When asked about the reasons for investing their retirement assets in cash, almost two-thirds of these Gen Xers (63%) say they fear losing their money and nearly one-quarter (24%) report they are not sure how best to invest their savings.
Perhaps not surprising, Generation X, which is also known as the latchkey generation due to independent childhoods that resulted from being raised by working parents, is preparing to make do with less support from Social Security in retirement. Just 11% of non-retired Gen Xers say they will wait until 70 to receive their maximum Social Security benefit payments with 47% reporting they were concerned Social Security may run out of money. This tops the proportion of non-retired Baby Boomers (38%) and Millennials (44%) who fear potential insolvency for Social Security.
“As the first generation to head into retirement without the safety net of a pension plan, the stakes are higher for Generation X and the margin for error is lower,” said Boyden. “Not only are Gen Xers facing a formidable savings gap, our findings suggest a knowledge gap is a formidable headwind that’s threatening to prevent many from reaching their dream retirement.”
Additional findings:
- More non-retired Gen Xers (84%) are concerned or terrified about the idea of no more regular employment paychecks in retirement than Millennials (79%) or non-retired Baby Boomers (74%);
- Millennials (1.7 hours) and Gen Xers (1.5 hours) spend on average nearly double the amount of time Baby Boomers spend each day worrying about money (0.8 hours);
- Two-thirds of non-retired Gen Xers (66%) worry that they won’t be able to grow their workplace retirement plan to the level they had hoped; compared to 61% of non-retired Baby Boomers and 64% of Millennials.
About the Survey
The Schroders 2023 U.S. Retirement survey was conducted by 8 Acre Perspective among 2,000 U.S. investors nationwide ages 27-79. The survey was conducted from February 13 to March 3 in 2023. The median household income for working Americans surveyed was $75,000.
For more information on the Schroders 2023 U.S. Retirement Survey, visit www.schroders.com/dc.
For further information, please contact:
Jennifer Manser O’Rourke
Head of Corporate Communications, North America
+ 1 212 632 2947
Schroders plc
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