senior Scoops

We are not saving enough

Every year, The Northwestern Mutual Life Insurance Co. (NWM) conducts a research study, in which they ask American adults about some of their thoughts concerning money. This year’s Planning & Progress Study 2024 was conducted by the Harris Poll on behalf of NWM. The survey took place between January 3 and January 17, 2024, among 4,588 US adults aged 18 and older.

On April 2nd, NWM issued a press release highlighting the study’s results relating to retirement planning. Before I dig into the numbers, I understand that every situation is different. Some will make do with far less, others will struggle with more.

The Numbers

Much of the data is broken down by generational perspective, here are the boundries for each group cited in the study by year of birth:

• Baby Boomers (1946 to 1964)
• Generation X (1965 to 1980)
• Millennials Generation (1981 to 1996)
• Generation Z (post-Millennial) (1997 to 2012)

In this article, I will compare what the survey respondents believed to be sufficient savings for a comfortable retirement versus what they actually have. The entire group, as a whole, believed that the amount needed was $1.46 million. Meanwhile, the actual savings in hand averaged across generations is $88,400. That is a huge difference. Obviously GenZs have much more time to close that gap than do Baby Boomers. Here is how those same numbers broke down by generational group.

What each generational group believes they need to retire:

• Baby Boomers——-$990K
• Generation X——$1.56M
• Millennials——-$1.65M
• Generation Z ——-$1.63

Now lets look at what the median amount each group had put aside for retirement, at the time of the study.

• Baby Boomers—-$120,300
• Generation X——$108,600
• Millennials——-$62,600
• Generation Z ——$22,800

Conclusion

Given this data, as an increasing number of Americans are moving towards retirement, Social Security benefits are a crucial source of retirement income. This information is from the Social Security website:

As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted.

Some estimates suggest the reserves will be exhausted sooner.

Just as changes were made 1983, so too can future changes be made to ensure full benefits beyond 2037, but there are no guarentees.

In closing here are two thoughts from NWM press release:

The ‘Silver Tsunami’ is here: 11,000 Americans will turn 65 every day through 2027; only half of Boomers+ and Gen X believe they’ll be financially ready for retirement

Decades of Difference: Gen Z started saving at 22 and expects to retire at 60; Boomers+ started saving at 37 and expect to retire at 72

What do you think?

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