Retirement Savings Threats Differ by Generation

Retirement planning is the one financial issue in which all generations are most vulnerable, but for different reasons.

A research report from Financial Finesse shows how perspectives and habits of different generations impact their financial behaviors. Millennials’ lack of investment knowledge, Generation X’s debt, late Boomers’ (ages 45 to 54) focus on college savings and early Boomers’ (ages 55 to 64) lack of wealth protection are factors preventing them from being retirement ready.   

Financial Finesse found that 83% of Millennials (younger than 30) are contributing to their retirement plan at work, and 74% are saving enough to capture the full company match contribution, if available. However, only 29% have run a retirement projection and only 17% believe they are on track to replace at least 80% of their pre-retirement income in retirement. In addition, 26% contribute to a traditional or Roth IRA.

According to the report, Millennials suffer from a relative lack of investment knowledge, with the lowest percentages that are confident that their investments are allocated properly and that have a general knowledge of stocks, bonds and mutual funds. Only 29% are confident their investments are allocated properly; 65% say they have a general knowledge about investments. In addition, only 38% have taken a risk tolerance assessment and only 25% rebalance their investments regularly.

Among Generation X (ages 30 to 44), 89% contribute to employer-sponsored retirement plan, and 74% are saving enough to capture the full company match. However, only 15% say they are on track to replace at least 80% of their income in retirement, and only 22% are contributing to a traditional or Roth IRA.

The report shows that despite their higher and increasingly dual incomes, Generation X is struggling more than other age groups with money management, retirement planning, college planning and investing. They have the lowest overall financial wellness of any generation.


What may be holding Generation X back is not their desire to save, but their level of debt. Of employees between the ages of 30 and 44 who completed an online financial wellness assessment, 49%—the most of any generation—indicated they were uncomfortable with the amount of debt they had.

Retirement remains the largest financial vulnerability for late Baby Boomers, the research report shows. While 95% contribute to their employer-sponsored retirement plan and 80% save enough to capture the full employer match, only 18% say they are on track to replace at least 80% of pre-retirement income in retirement, and only one-quarter contribute to an IRA.

One area that this group prioritizes higher than their actual vulnerability is college funding, even though there are a plethora of available college financing options that make saving for college a lower priority than saving for retirement. After all, the report notes, there is no financial aid to apply for in retirement.   

Despite their relative financial strength, retirement is the biggest vulnerability even for those closest to retirement, the early Baby Boomers. Ninety-five percent contribute to their retirement plan at work, and 88% contribute enough to get the full company match; however, only 25% say they are on track to replace 80% of their income in retirement and only 29% contribute to an IRA.  

For Early Boomers, the greatest discrepancy between their priorities and vulnerabilities is the lack of wealth protection. Seventy-four percent do not have umbrella liability insurance and 84% do not have long-term care insurance. 

Financial Finesse studied the distinct financial issues, priorities, and vulnerabilities of Millennials, Generation X, late Baby Boomers, and early Baby Boomers, with a focus on strengths, weaknesses, opportunities, and threats each generation faces, as well as their distinct financial education and planning needs. The complete report of Financial Finesse’s Generational Research can be downloaded from