By Kara Stiles, Forbes Staff
Only about 50 percent of working American adults feel prepared to live comfortably in retirement. It’s a figure that remains relatively consistent across age groups, but each generation faces a retirement predicament of its own.
We spoke to Jennifer Brown, manager of research at the National Institute on Retirement Security, who has quick advice for three generations on boosting retirement readiness.
1. The generation: Millennials
The downside: The Pew Research Center reports millennials’ higher rates of student loan debt, poverty and unemployment, and lower wealth and personal income compared to Gen X and baby boomer generations when they were in the 20-35 age range.
The goal: Prioritize saving
The advice: “Open a retirement savings account, even if your employer does not provide one for you, and save early and often. Max out an IRA, if you are not offered an employer savings account,” says Brown. “Look into tax incentives such as the Federal Saver’s Credit to increase your retirement savings and take full advantage of an employer match to save approximately 15% of your income.”
A Gallup report concluded that millennials are also more likely to hop between gigs than their predecessors—and they can leverage this job movement to reassess their savings and employer perks: “Consider retirement benefits when looking for and changing jobs,” advises Brown. “Many employers still provide traditional defined benefit pensions or generous employer matches to a 401(k).”
2. The generation: Generation X
The downside: Only 12 percent of Gen X’ers are “very confident” that they will be able to fully retire comfortably. It doesn’t help that many Gen X’ers find themselves straddling two costly responsibilities: raising kids and caring for aging parents.
The goal: Make a plan
The advice: “If you are a Gen X’er, take the time to sit down with a certified financial planner and make a plan for retirement, if you have not already done so. He or she can help you determine how much you should be saving and help you make up for any retirement shortfalls,” explains Brown.
“A certified financial planner can also help you change your plan if you need to take time out of the workforce to provide parenting or caregiving, or if you need to cut down to part-time work. Understand that working past age 65 may not be an option, as over half of Americans leave the workforce between age 61 and 65.”
3. The generation: Baby boomers
The downside: Many baby boomers were already mid-career when employers started adopting 401(k) plans, so they haven’t had as much time to save. Later access to 401(k) plans might also mean they’re adjusting to less stable retirement outlooks: “Traditional employer-sponsored pensions that pay a fixed benefit from retirement until death—once a mainstay for middle-class retirees—have been disappearing, replaced by 401(k)-type plans whose payout depends on unpredictable investment returns,” reports the Urban Institute.
The goal: Catch up
The advice: “Sit down with a certified financial planner and make sure that you are on track for retirement and set a goal year for retirement,” shares Brown. “Discuss making additional catch-up contributions to make up for years that you may not have saved enough or were out of the workforce.”
To see more guidance from Brown and other retirement experts, explore Retirement Checkup, a feature that helps you pinpoint your preparedness and improve your savings.
Sources: Transamerica Center for Retirement Studies, The Hamilton Project (Brookings), the Urban Institute, Gallup, Pew Research Center