Boomers are ready for retirement, and want younger generations to prepare for it, too
Live long and frugal, the boomers say, and you’ll prosper.
Almost three-quarters of baby boomers are ready for retirement, according to a study from Allianz. And most say that living life on the cheap side will leave you more money in your later years.
Don’t get it twisted: Nearly two-thirds of boomers still say they are scared to run out of money before they run out of time, but that doesn’t stop them from feeling more financially prepared than ever.
The study took 1,000 Americans from each generation: baby boomers, Gen Xers, and millennials, and analyzed how they are doing with retirement savings.
“A new frugality has taken hold with baby boomers that is leading to a stronger sense of financial preparedness and confidence than seen in previous Allianz Life studies,” Allianz says. Nearly two-thirds of boomers count themselves as savers over spenders. Additionally, 61 percent say “they know exactly how much money is in their accounts.”
This has boomers telling everyone that saving for retirement is a big deal. Nearly two-thirds say it’s as important as food or housing. Because of this outlook, baby boomers have more saved than their younger counterparts (which could also be in part to their age and having more time to save than Gen X and millennials).
While baby boomers feel more prepared than ever for retirement, it’s millennials — not Gen Xers — that are next in line for retirement preparedness. Allianz says that 74 percent of millennials feel financially on track for retirement, compared to only 63 percent of boomers.
The skipping of a generation for a smart money mindset may be due to millennials simply trying to avoid the money mistakes of their boomer (and Gen X) parents. Allianz says two-thirds of millennials believe they’re “much better” than their parents are with money. About the same say they don’t like the idea of debt because they witnessed how problematic it was for their family.
As much as millennials may claim to be learning from their parents and older generations, their financial practices aren’t proving them right. Sure, millennials would rather save for retirement than start a family — how can they afford a child when they can’t even afford to save for their own future? — but wanting to save and actually saving aren’t the same thing.
Older Americans are doing better than their younger friends, which could come with the very real fact that “older” and “wiser” go hand-in-hand. Millennials are staying in big cities, paying more for housing, and dining out multiple times a week. They may like their living situations, except it’s making them sick (which will only cost them more in the long run!)
So maybe some millennials believe they are more on track than their parents, but that doesn’t mean they are. A lot of young people are still living paycheck-to-paycheck — more than half of millennials with below 700 credit scores — which is killing their credit histories and financial well-being. Maybe they aren’t as different from other generations as they might think; maybe some millennials will always be struggling just like Gen Xers and baby boomers before them.
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Article last modified on November 14, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Advice From Baby Boomers: Never Stop Saving - AMP.