Have you ever wondered if your retirement savings will be enough? A recent report by Morningstar paints a concerning picture for Baby Boomers and Gen Xers, with a higher percentage facing potential shortfalls compared to younger generations (1). But why the disparity?
Let’s unpack the reasons behind this trend and help you navigate your own retirement planning journey.
Shifting Sands: The Changing Landscape of Retirement Benefits
The way we save for retirement has undergone a significant transformation. Traditionally, many workers relied on pensions – guaranteed payouts from employers after retirement. However, these plans have become increasingly rare, replaced by defined contribution plans like 401(k)s.
While 401(k)s offer greater control over your investments, the responsibility for saving now falls directly on the employee’s shoulders. This shift, particularly for those caught in the middle of the transition, can leave gaps in retirement preparedness.
Millennials and Gen Z: A Different Playing Field
Younger generations benefit from several advantages. Automatic enrollment in retirement accounts and a wider variety of investment options can significantly boost their savings potential. Additionally, they have more time to leverage the power of compound interest, allowing their nest eggs to potentially grow over a longer period.
Tools and Strategies for a Secure Future
While the news for Boomers and Gen X may seem daunting, there are still steps you can take to help improve your retirement outlook:
- Review your current savings: Take stock of your existing retirement accounts and assess your progress towards your goals.
- Consider delaying retirement: Working a few extra years can significantly increase your savings and allow you to maximize Social Security benefits.
- Seek professional guidance: A financial professional can help develop a personalized retirement plan, considering your risk tolerance, investment goals, and desired lifestyle.
This doesn’t have to be a solitary journey. Schedule a complimentary consultation with a financial professional to discuss your specific situation and explore strategies to create a secure and fulfilling retirement. Together, we can build a financial plan that empowers you to confidently face the future.
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(1) Insider, B. (n.d.-a). Business insider. Boomers and Gen X face rockier retirement than younger generations. https://apple.news/AsDjH4JfUSvabMwyqwSxb-A
For more complete information about your 401(k) investment options, call your company’s plan administrator or your financial professional for a prospectus. The prospectuses contain details on investment objectives, risks, fees, and expenses, as well as other information about your plan’s investment options, which you should carefully consider. Please read the prospectuses thoroughly before sending money. We are not affiliated with the Social Security Administration or any other governmental agency. This information is being provided only as a general source of information and is not intended to be the primary basis for investment decisions. It should not be construed as advice designed to meet the particular needs of an individual situation. Please seek the guidance of a financial professional regarding your particular financial concerns. Consult with your tax advisor or attorney regarding specific tax issues.
