Baby boomers are facing a major retirement issue

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Baby Boomers and Retirement Plannings

Retirement planning for today's twenty-somethings is not the same as it was for their parents or grandparents. Fifty years ago, it wasn't unusual for long-term employees to have a pension that guaranteed a certain amount of income in retirement. But today, this is no longer the case. And this change in workplace retirement benefits makes a big difference in how each generation looks at retirement planning.

A 2016 Franklin Templeton Investments survey of 2,019 adults found that the majority of those who are within a few years of retirement are feeling anxious about their ability to meet retirement expenses. Much younger millennials also share these concerns. But in spite of this, more than half (57 percent) of millennials say they haven't even started saving for retirement yet.

[See: 10 Ways to Get Ready for Retirement After Age 50.]

Baby boomers, gen Xers and millennials are each facing unique financial concerns, but also have a few financial anxieties in common. Here's a look at how generational differences impact retirement planning, and what you can do to improve your financial situation at each stage of life.

Discover the average retirement age in every state:

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Average retirement age in every state
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Average retirement age in every state

Alabama - Age 62

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Alaska - Age 65

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Arizona - Age 63

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Arkansas - Age 62

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California - Age 64

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Colorado - Age 64

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Delaware - Age 62

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Connecticut - Age 64

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Florida - Age 63

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Georgia - Age 62

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Hawaii - Age 63

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Idaho - Age 63

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Illinois - Age 63

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Indiana - Age 63

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Iowa - Age 64

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Kansas - Age 65

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Kentucky - Age 62

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Louisiana - Age 63

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Maine - Age 64

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Maryland - Age 64

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Massachusetts - Age 64

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Michigan - Age 62

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Minnesota - Age 63

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Mississippi - Age 63

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Missouri - Age 63

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Montana - Age 63

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Nebraska - Age 65

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Nevada - Age 63

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New Hampshire - Age 65

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New Jersey - Age 65

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New Mexico - Age 63

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New York - Age 64

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North Carolina - Age 63

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North Dakota - Age 63

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Ohio - Age 63

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Oklahoma - Age 63

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Oregon - Age 63

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Pennsylvania - Age 63

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Rhode Island - Age 64

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South Carolina - Age 62

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South Dakota - Age 63

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Tennessee - Age 63

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Texas - Age 64

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Utah - Age 65

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Vermont - Age 65

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Virginia - Age 63

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Washington - Age 64

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West Virginia - Age 62

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Wisconsin - Age 63

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Wyoming - Age 65

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Baby boomers. One major issue for baby boomers is lifespan. They're living longer than their parents or grandparents did, so they need to save up for more years of retirement. Many baby boomers are enjoying more vibrant health than older generations, but that doesn't mean they won't face medical bills down the road.

The Franklin Templeton survey found that 30 percent of baby boomers who are retired started retirement earlier than planned due to unforeseen circumstances. Many baby boomers (70 percent) expect to rely on Social Security throughout retirement, and 29 percent expect medical costs to be their top retirement concern.

Boomers who are ready to retire but don't have quite enough money to pay for their desired lifestyle might be able to improve their situation by working part-time in retirement. Part-time work can allow you to reduce your withdrawals from retirement accounts and give your investments more time to grow. Pay close attention to how continued earnings interact with your Social Security payments to make sure that part-time work won't temporarily reduce your Social Security benefit. A part-time job can help you to enjoy many of the perks of retirement, such as increased leisure time, while reducing the threat of running out of money too soon.

[See: 10 Costs You Can Eliminate in Retirement.]

Gen Xers. Now starting to turn 50, Gen Xers are the current sandwich generation. Many are still parenting kids or starting to send them to college, while also taking care of aging parents. This means that many Gen Xers aren't where they need to be with retirement savings, and it's time to buckle down.

A Transamerica Center for Retirement Studies survey of 4,550 workers found that 45 percent of gen X workers are putting off thinking about retirement until they get closer to their retirement date. However, this delay in planning could hurt them later if they also put off saving and investing for the future to focus on current needs. This generation is likely to be highly reliant on 401(k)s and many are behind on savings, but they still have a little bit of time to catch up.

Millennials. The spending and savings habits of millennials differ from those of older generations. Millennials dine out more often and purchase more retail goods than gen Xers and baby boomers, but they're frugal with their money and spend less overall than the older cohorts, who make less frequent larger purchases, according to a TD Bank poll of more than 1,500 consumers.

Nearly a third of millennials (32 percent) are worried about running out of money in retirement, and 69 percent expect to rely on their 401(k)s for income in retirement, the Franklin Templeton survey found. A comfortable retirement with a 401(k) plan requires diligent saving habits. Millennials who are currently saving for retirement in a 401(k) should increase their contributions as their income grows. Those who haven't started saving yet should consider cutting back on some of that discretionary spending in favor of building wealth for the future. Those who don't have access to a 401(k) at work could get tax perks by contributing to a Roth IRA or myRA.

[See: 10 Retirement Planning Moves to Make in Your 20s.]

What individuals want from retirement is likely to vary by generation. But, for every generation, saving for retirement gives you options that those without money in the bank don't have.

Copyright 2016 U.S. News & World Report

Now check out the best states in the U.S. to retire in 2016:

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Best states for retirement
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Best states for retirement

1. South Dakota

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2. Iowa

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3. Minnesota

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4. Alaska 

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5. Oregon 

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6. Colorado

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7. Hawaii 

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8. South Carolina

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9. Nebraska

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10. Wisconsin

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