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Late Boomers and Generation X: Focus on Retirement Planning

MP900405586According to, Late Boomers and Generation X are not excelling at retirement planning—but why? Many people in these age groups have the resources they need to retire well. However, having money and knowing how to manage it are two different things. interviewed two economics professors who cite the disappearance of “defined-benefit” accounts (pensions) and the rise of “defined-contribution” plans (such as 401(k)s) as a factor. A pension is based on a worker’s service to the company, while a 401(k) is dependent on investments and the stock market. While people of past generations are often lauded for being savers, there were surely some people who were not all that financially savvy.  Yet, whether you are savvy or not, a pension provided a layer of protection that a 401(k) does not.

Lack of financial literacy and increased access to credit also play a role. Workers in the last few decades were more likely to have started their adult lives with more debt than their parents. They are also more likely to pay more for their own education (to their children’s). advises:

“…shift your mindset. When considering money matters, always make retirement one of your top priorities. Save with every single paycheck, whether you’re 22 or 62. Don’t assume you’ll be able to work past retirement age to make up for any shortfall in your savings, as many older workers are laid off. And remember that your expenses in retirement may increase, due to health costs.”

The experts interviewed in the article aren’t sure going back to pensions is the solution: the shift to defined-contribution plans has been made and with the way people change jobs, we need our retirement funds to be portable. What you can do to feel more secure is to educate yourself and seek the guidance of a Fee-Only financial planner so you don’t have to make all of these decisions on your own.