Retirement planning: Millennial, Baby Boomer, or GenX, here’s what you should be doing

By RetirementFOXBusiness

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Everyone knows we should save for retirement, but best way to do that depends on your age, according to Joseph Ready, Wells Fargo’s executive vice president of Institutional Retirement and Trust.

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Ready’s comments were given to FOX Business ahead of the release of the Wells Fargo/Gallup Investor and Retirement Optimism Index, on Tuesday, which found that although investors are optimistic about the state of the economy, this optimism isn’t necessarily translating to increased confidence about retirement savings.

Retirement isn’t a one size fits all. Ready told FOX Business his recommendations on how retirement planning and saving should be approached, depending on age.


Millennials have time before they retire, therefore, they can accept more risk. Overall, historically, equities have offered the best returns, and although they are considered riskier investments millennials can be more exposed to equities.

Wells Fargo’s survey showed that investors are not too concerned with the recent market volatility, with 60% of survey respondents saying that right now is a good time to invest in the financial markets.

Generation X

The overall goal should be to have 80% of pay as a benchmark during retirement, not right out of the gate, according to Ready. Of course, this will vary depending on expected fixed costs in retirement. For people in this age group, it is time for a reality check to measure their progress in terms of having adequate funds for retirement. Ready noted that a 45 year old still has 20 working years left, so there is time to adjust.

At this stage it is the time to “get real” about retirement – including what sort of lifestyle you want to have, what your expenses will be and what you can afford.

The Wells Fargo’s survey found that when it comes to thinking about retirement, the top concerns are how to spend leisure time (53%) and where to live (48%).

How to pay for these lifestyles comes in third, with 45% of people thinking about the best age to take Social Security, tied with paying for routine medical care. Next, is the strategy to draw income from retirement accounts at 41%.

Baby Boomers

Ready told FOX Business that of the 55-plus age group, only 20% have their retirement savings allocated properly: 60% are allocated too aggressively (making them vulnerable to a market correction) and 20% are too conservative, which means they are potentially leaving money on the table. The important consideration for those about to retire or in retirement is deciding what assets to draw upon first, with the consideration if minimizing taxes and maximizing payouts.

Tax rates are somewhat controllable, unlike market performance, so minimizing taxes during retirement is a guaranteed way to maximize the money people have.

Work in retirement?

People are having longer, healthier lives and therefore many are planning on working into retirement, Ready told FOX Business. However, although some people may want to work past conventional retirement age he worries about planning on this income in order to survive retirement. There are life events that could get in the way of this. So retirees need to consider if they will have physical and mental health to be able to work in retirement.

Although improved from four years ago, the Wells Fargo survey found that relatively few investors, 34% today versus 26% in 2014, say they are highly confident they will have enough money to maintain the lifestyle they want through retirement. This comes at the same time that investors say they are optimistic on the stock market, economic growth and unemployment, with 60% of investors at least somewhat optimistic for the 12-month outlook of these economic factors.

Ready told FOX Business that people should “save 10% of your salary, don’t put it off….Make sure you maximize your employer match.” For investors that are behind on retirement he recommends that investors set annual guidelines and goals, for example, a goal to increase their saving by 1% each year. Ready also suggested reinvesting the tax savings from tax reform into retirement savings.