By: Clay Henry, Senior Vice President and Senior Wealth Planner, PNC Wealth Management
When it comes to retirement preparation, members of Generation X worry more, are saving more and taking greater responsibility for their nest eggs than baby boomers, according to PNC’s recent Perspectives on Retirement Survey. The survey measured the attitudes of Generation X (ages 35 to 49) and baby boomers (ages 50 to 68) on retirement preparedness. More than half of respondents believe they will need $1 million or more to be comfortable in retirement. Gen X estimates needing $1.5 million while baby boomers’ average expectation is $1.3 million. However, 74 percent of boomers have yet to reach the $1 million milestone. While only 15 percent of respondents are still coping with the effects of the Great Recession, 70 percent changed their financial behavior as a result. A majority of Gen X (51 percent) say they are saving more for retirement, compared to 37 percent of boomers. One interesting outcome of the Great Recession is that nearly three-quarters of survey respondent have made meaningful changes in financial behavior, especially among Generation X. Changing habits is one of the most challenging tasks, particularly in managing spending and debt, increasing savings and seeking advice.
Younger investors worry more about having enough money to live on for the rest of their lives. Three-quarters of Gen Xers agreed with the statement, “I worry that my savings may not hold out for as long as I live,” as opposed to 55 percent of boomers. In working with clients, I have found that there is no magic number that applies to an entire generation. It depends on lifestyle and how effectively individuals manage debt throughout their working years. It’s important to note that whether you are baby boomer or entering the workforce, it’s critical to take control early on and own your retirement planning.