News Column

Gen-Xers believe it'll take $1M to retire

August 27, 2014

By Nanci Hellmich, @nanchellmich, USA TODAY

The majority of Generation X workers believe they'll need to save a million bucks or more for retirement, and almost a third think they'll need more than $2million.

But so far, they only have about $70,000 in retirement savings for their households, according to a report out today from the non-profit Transamerica Center for Retirement Studies.

Most (83%) Gen Xers -- those born from 1965 to 1978 -- are concerned that Social Security won't be there when they're ready to retire, and the majority (85%) think they'll have a much harder time achieving financial security than their parents did, says the report, which is based on a survey of 4,143 full-time and part-time workers, including 1,120 Generation Xers.

Only 14% are very confident they'll be able to retire one day with a comfortable lifestyle, and about a third expect a lower standard of living in retirement.

In 2015, the first Gen Xers begin turning 50, says Transamerica Center President Catherine Collinson. "Many are saving for retirement, but most are not saving nearly enough to fully grow their nest eggs."

It's never too late to start saving for retirement -- or to begin saving even more, Collinson says. About 84% of Gen Xers who are offered a 401(k) or similar plan participate in the plan at a median annual contribution rate of 7% of their annual salaries. "They should be saving 10%, 12% or even 15%," she says. "Procrastination is the enemy of retirement planning."

Other findings:

•31% think they'll need to save $2 million or more for retirement; 25%, $1 million to $2 million; 20%, $500,000 to $1 million; and 24%, less than $500,000.

•39% would rather not think about retirement investing until they get closer to retirement.

•54% plan to work past age 65 or don't plan to retire. Most (62%) would like to ease into retirement by staying employed but work fewer hours so they have more leisure time, or they would like to work in a less demanding job that gives them greater personal satisfaction.

•That said, only 44% are keeping their job skills current; 18% are networking; and 17% are checking out the job market. "If they want to stay in the job market, Gen Xers need to be hyper-vigilant about keeping their job skills up to date and relevant," Collinson says.

•61% have a retirement strategy, but only 14% have a written plan.

•65% say they don't know as much as they should about retirement investing.

•35% of those who are investing for retirement use a financial adviser.

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Source: USA Today

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