Retirement Outlook Much Worse For Younger Workers

Posted on June 26, 2006

A MarketWatch article does not pay a pretty retirement picture for young workers. The article says 49% of Generation X, people born from 1965 to 1972, will be short on their retirement needs. This compares to 44% of late boomers (1955 to 1964) coming up short and just 35% of early boomers (1946 to 1954). The differences may not look that extreme but the article also says that Gen X workers won't get the same benefits as their elders.

The study projects that Generation Xers will build wealth at the same rate as earlier generations, but "what they don't have is the same kind of Social Security benefits coming their way, and they are a cohort relying almost entirely on 401(k) plans rather than having any money from defined-benefit plans," said Alicia Munnell, co-author of the report and director of the Center for Retirement Research, in a telephone conference. The age at which retirees can receive the maximum monthly Social Security benefit is slowly increasing, with those born in 1960 or later eligible at age 67, up from 65. Plus, Munnell said, Generation Xers will live longer on average, meaning they'll need more money in retirement. The early baby boomers are "in better shape than the other cohorts," Munnell said.

And this article didn't even get into issues like today's huge deficit, offshoring and the rising costs of tuition that will have a huge impact on Gen Xers and the generation that follows them.