Early boomers may be the last age group on track to retire with enough savings to maintain their financial security.

A Pew Charitable Trusts study—Retirement Security Across Generations: Are Americans Prepared for Their Golden Years?—finds that early boomers (born 1946 to 1955) in their 50s and 60s had higher overall wealth, financial net worth and home equity than Depression babies (born 1926 to 1935) and war babies (born 1936 to 1945) had at the same age, putting them in a good financial position for retirement.

The picture of wealth accumulation and savings for Americans born after 1955 is more mixed. Generation X (born 1966 to 1975) had a higher net worth than late boomers (born 1955 to 1965) when they were in their 30s and 40s, but neither group has as much wealth as early boomers had at the same age. Late boomers had more wealth than early boomers when both were in their 40s and 50s, but neither they nor generation X had as much as war babies.

Read: Getting employees to save more for retirement

However, both cohorts of baby boomers and generation X have significantly lower asset-to-debt ratios than the older groups. Over the last two decades, depression and war babies have been getting rid of debt while baby boomers and generation X have been accumulating debt.

As of 2010, war babies’ asset levels were 27 times higher than their debt levels. By comparison, late boomers’ assets were about four times higher than their debt, and generation X’s assets were about twice as much as their debt.

All groups experienced wealth losses in the Great Recession, but generation X was hit the hardest. From 2007 to 2010, early and late boomers lost 28% and 25%, respectively, of their median net worth. On the other hand, generation X lost 45% of accumulated wealth.

Read: Workers around the world unprepared for retirement

“As policy-makers focus on Americans’ retirement security, particular consideration should be paid to how younger generations of workers can make up for these losses and prepare for the future,” says Erin Currier, who directs Pew’s economic mobility project.

Replacement rate analysis shows that the youngest cohorts will not have enough assets for a secure retirement.

While early boomers have acquired enough savings and wealth to replace 70% to 80% of their pre-retirement income, late boomers will have about 60% while generation X will only have enough resources to replace about 50% of their pre-retirement income.

Read more:

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

Join us on Twitter

Add a comment

Have your say on this topic! Comments that are thought to be disrespectful or offensive may be removed by our Benefits Canada admins. Thanks!

* These fields are required.
Field required
Field required
Field required