Gen-Xers Better Prepared for Retirement Than Baby Boomers
NEW YORK -- Lara Cohn's goal is to increase the amount she allocates into her 401(k) by 1 percent each year to ensure that reaches her retirement goals.
As a Gen X-er, Cohn, a 44-year-old New York public relations executive, has always heeded the advice of her family to save for the future. Following this sentiment means that she will have a solid nest egg by the time she retires, giving her the freedom to travel. Along with a portfolio of IRAs and an emergency fund, Cohn balances her retirement needs with her love of traveling.
"It makes me feel safe knowing I can take care of myself," she said. "After the recession hit in 2008, I definitely lost a chunk of my retirement savings like many of my other fellow Gen X-ers, so it's become very important for me now. I make it a priority to have paid off all my debt and save more than before."
Cohn's attitude toward saving for retirement mirrors that of her counterparts. More Gen X-ers, or those between the ages of 35 and 49, are saving more for their retirement than baby boomers, those between the ages of 50 and 68, according to a recent survey by their PNC Financial Services Group, the Pittsburgh-based financial institution. The survey found that 51 percent of Gen X-ers are increasing their savings while only 37 percent of boomers are following the same trend.
The Great Recession spurred added concern about being adequately prepared for retirement, and Gen X has been more versatile in adjusting its behavior.
"One of the most challenging tasks is changing habits, particularly in managing spending and debt and increasing savings and seeking advice," said Celandra Deane-Bess, senior wealth planner for PNC Wealth Management. "I think Gen X is clearly more concerned about retirement, but they are also changing their behavior adequately to ensure better outcomes in the future."
Gen X-ers are more worried about saving enough money for their future and are taking more responsibility with ramping up their savings with 65 percent who agreed that they are responsible for their retirement and aren't counting on relying upon an employer pension or Social Security. Only 45 percent of Boomers agreed with this belief.
For the past several years, Matt Caldwell, a 34-year old national account manager for Siemens who lives in Rancho Santa Margarita, California, has been investing steadfastly in his 401(k) and IRA. Saving for retirement has remained a priority, because not only does it provide financial independence, it means he and his wife, Alicia, will be able to pay for their daughter's college tuition. Part of the commitment means that both of them allocate a generous portion of our salaries to their retirement accounts.
"The sooner we are able to establish a nest egg, the larger it will grow over time and can provide a comfortable retirement and security for the uncertainties of life," he said. "It means I can afford to take my wife to Greece and retire in my 50s."