Posted 3/23/2016 by
by Tucker Smith, CRUNCH NETWORK CONTRIBUTOR
Tucker Smith is in marketing and business development for OneRent.
From baby boomers to Generation X to millennials, it seems that each generation faces a new set of problems that they believe to be tougher to solve than those faced by the former generation. Baby boomers grew up during the height of the Cold War, Gen Xers took the brunt of the recession and millennials are burdened with more student debt than ever before.
Retirement is a hotbed issue that elicits different reactions depending on the age of the individual in question, but proves to be a problem that affects all three generations. Varying degrees of access, familiarity and trust in technology and differing definitions of a successful retirement are at the root of each demographic’s approach to the subject.
What’s interesting is that some traditional forms of investing, such as real estate and stock trading, are thought of differently by each demographic, while other traditional mediums, such as the 401k, are utilized in relatively the same manner.
But more on that later. First, let’s break down how each generation handles retirement planning.
Born between 1946 and 1964, the baby boom generation was raised in a conflicted and industrialized world that witnessed the Korean War, Vietnam and the creation of the United States as an industrial superpower. They were among the first to be born into an America that had a plan for their retirement: Social Security.
Passed in 1935, the Social Security Act was intended to provide the elderly with the means to exit the workforce at age 65. Baby boomers were raised to have full confidence in the program, which explains why one-third of their population today plans on using Social Security as their primary source of retirement income.
In theory, the concept is simple: Those who are able to work will give a portion of their wages to those who are no longer able to work, which by today’s numbers amounts to 2.8 workers for every Social Security beneficiary. The average beneficiary can expect $1,229.85 each month from Social Security, making that the primary source of income for 24.31 million baby boomers in retirement.
This cold, hard fact has caused almost two-thirds of baby boomers to plan on retiring after the age of 65, with more than half of them classifying a reduced work schedule andretirement as the same.
Though they grew up hearing the benefits that came with Social Security, baby boomers are quickly realizing that it is not enough to retire on, and they are scrambling like crazy to make ends meet.