A study has found that Generation X overall is behind in retirement preparedness at a similar stage in their life as their predecessor Baby Boomers, even though they will be “more likely to rely on their own savings when it comes to retirement security” than Boomers.
The Employee Benefit Research Institute found for example that Generation X families were less likely to have a defined benefit retirement plan than were Baby Boom families when their family heads were the same ages, as well as less likely to own a home—another potential source of retirement security.
“While Generation X families were more likely to have a defined contribution plan and have higher balances in the plan, they also had higher median debt — including student loan debt — and lower median net worth,” it said.
The study also looked at how the subsequent Millennials generation stand in comparison to when Generation X was at a similar point in their lives. It found their home ownership rates were lower while they had higher median debt levels, “led by the substantially higher median student loan levels.”
Said the study, “how these generations continue to manage their finances and their working careers will be imperative for financial success in retirement. Will they up their savings? Will they work longer? Will they reduce their debt? All these will be difficult for many, but some actions are going to be necessary for these generations to be financially prepared for their final phase of life.”