Rethinking Retirement: Four American Generations Share Their Views on Life’s Third Act
The financial realities of retirement in America are changing dramatically. Unprecedented life expectancies, the impending retirement of the baby boom generation, and emerging models for new ambitions and lifestyles in later life are re-crafting what retirement means to us – and how we will finance it. In 2008, Age Wave collaborated with Charles Schwab to launch what may be the most comprehensive cross-generational study on retirement – a total of 3,866 interviews conducted by Harris Interactive spanning four generations of adults: the Silent Generation (ages 63 to 83), the Baby Boomers (ages 44 to 62), Generation X (ages 32 to 43) and Generation Y (ages 21 to 31). In our conversations with all generations of Americans, we explored key issues for the future of retirement: What are Americans’ dreams for retirement? How do they define a successful retirement? What kind of help do Americans need and want from their employers, educators, industry and others? And do the generations differ wildly or is there common ground? Among the key findings:
- Survey respondents are almost twice as likely to say retirement is an opportunity for a new, exciting chapter in life as to say it is a time to rest and relax. Some 60 percent say they would like to work in an entirely different field in retirement.
- Many today realize they may need to support family members on all sides: parents, children and even siblings. Four in 10 anticipate they will need to financially support their parents. One in four worry they will have to financially support their siblings.
- Overall, the generations are clearly divided on whether this new life stage is about “me” or “we.” Fifty-five percent say they want to focus on their own needs and interests in retirement, while 45 percent view it as a time to give back to family and community.
- Only a quarter of survey respondents say they clearly understand Social Security and how it works. Just 11 percent say they understand Medicare very clearly.
- Family and friends received an average grade of “C” as trustworthy sources for information about financial security during retirement.
- Employers also received an average grade of “C” Seventy percent of those surveyed wish that their employer provided professional advice about saving and investing – with retirement preparation beyond a 401(k) or a 403(b) the most sought-after topic (69 percent).
- Professional financial advisors received the highest grade among financial providers, with an average grade of “C+” as a trustworthy source for information about financial security during retirement; banks received a C-; brokerages received a D+ and insurance companies received a D.
- With each succeeding generation, a pronounced mind shift from dependence on entitlements toward financial self-reliance is emerging. Generation Y anticipates 61% of their retirement funds will come from their personal savings and investments – twice as much as for the Silent Generation.
- Education – at work and in the school system – is seen as a key to a successful transition into a new era of financial self-reliance. Ninety-five percent of those surveyed say that on society’s new path to financial self-reliance, basic financial management should be a standard part of our high school curriculum.
