The vast majority of American baby boomers and generation X believe that the traditional definition of retirement is a “romantic fantasy of the past,” finds an Allianz Life study.
The study also finds more than eight in 10 (84%) from both generations said they feel that a retirement starting at age 65 spent “doing exactly what you want” is now unrealistic.
Gen X respondents were much more hopeless about their ability to achieve retirement goals and about their overall financial situation than were their boomer counterparts. More than two thirds (67%) of gen Xers agreed with the idea that supposed targets for how much you need to retire are way out of reach versus less than half of boomers (49%).
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Significantly more gen X respondents also admitted to getting “bogged down with uncertainty when planning for retirement” (64% versus 43% of boomers), believing it is “useless to plan for retirement when everything is so uncertain” (44% versus 31% of boomers), and feeling that they will “never have enough money to stop working” (68% versus 43% of boomers).
“While our study confirms that many boomers still lack confidence about their future, it reveals alarming realities about the significant angst and pessimism gen X feels regarding the current and future state of their finances,” says said Katie Libbe, Allianz Life vice-president of consumer insights. They’re the next generation that’s quickly approaching retirement and their hands-off approach to planning and preparation is alarming.”
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Each generation in the study generally feels their circumstances have been tougher to manage. For example, both Gen Xers and Boomers think that their generation is burdened with more expenses (90% and 80% agreement, respectively), more uncertainty (86% and 72%) and more risk (78% and 64%) than their counterparts.
However, when it comes to jobs, money, and retirement, even baby boomers agreed that Generation X has it much tougher in the following areas: planning for retirement, saving money, keeping a job, staying out of debt, getting a job.
Despite clear concerns about their financial situations and prospects for a comfortable retirement, both generations are surprisingly relaxed about planning for their financial futures. More than half of each generation (boomers 65%, gen X 53%) agreed with the statement “when it comes to retirement, I just have this feeling that everything’s going to work out.”
Furthermore, a larger percentage of gen X respondents think they will “just figure it (retirement) out when I get there” (46% versus 36% of boomers) and “just don’t think about putting money away for the future” (52% versus 32% of boomers).
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This “head-in-the-sand” approach to financial planning likely goes back to feelings of hopelessness these generations—particularly generation X—have about their current situation. Nearly three-quarters of gen Xers (72%) and 60% of boomers agree that it is “almost impossible to figure out what your (retirement) expenses are going to be.”
More than half of gen X respondents (52%) and nearly a third of boomers (32%) also agreed that with the amount of current expenses, they “just don’t think about putting money away for the future.” As such, nearly half of gen Xers (48%) and more than a quarter of boomers (27%) say they are not clear on how much money they’ll need to retire.