What retirement means to Baby Boomers, Gen X, Millennials

Retirement planning has changed so much over the years. For our parents and grandparents, at age 65 your employer hosted a retirement party for you and presented you with a gold watch. Fast forward to the 21st century and retirement takes on a whole new meaning.

A new study from nonprofit Transamerica Center for Retirement Studies (TCRS) examines the finances, health and happiness of three generations in the workforce: Baby Boomers, Generation X and Millennials.

Catherine Collinson, CEO and president of Transamerica Institute and the Transamerica Center for Retirement Studies, discussed with Fox Business the perspectives and preparations across these three generations and what retirement means to each.

Boomer:  Among the three generations interviewed for the survey, what does retirement mean to each?

Collinson: Once upon a time, not that long ago, retirement was synonymous with an abrupt and complete stop to work at age 65. According to findings from our newest survey, today’s workers have a much different vision.

They view retirement as a new chapter in life that may include continued work but with more free time to pursue personal interests. When asked what words they associate with retirement, working Baby Boomers, Generation X, and Millennials most often cited “freedom,” “enjoyment” and “stress-free.”

As the generation that is closest to it, Baby Boomers (81 percent) are more likely to be looking forward to retirement than Generation X (70 percent) and Millennials (68 percent). At the same time, Baby Boomers (69 percent) are also more likely than Generation X (57 percent) and Millennials (42 percent) to either expect to retire after age 65 or not be planning to retire.

What do all three generations share in common? More than half (55 percent) plan to work at least part time in retirement.

Boomer: With people living longer than any other time in history, what preparations are these groups making for their journey leading up to retirement?

Collinson: The gift of longevity requires that we extend our working lives and plan for potentially longer retirements. Financial preparations receive a lot of airtime in the media – and achieving financial security is all-critical.

However, tapping into this gift of extra time also requires that we professionally prepare ourselves so that we can remain relevant and employable in the fast-changing marketplace. Further, we must safeguard our health so that can work, enjoy life and retire on our own terms.

The good news is that many workers are already thinking in these terms and are taking steps to prepare themselves. However, the not-so-good news is that most are not doing enough. Consider these findings from the survey:

  • Seventy-five percent of workers are saving for retirement through an employer-sponsored 401(k) or similar plan and/or outside of work.
  • Only 40 percent are focused on keeping their job skills up-to-date so they can continue working past age 65 and/or in retirement.
  • Seventy-four percent are concerned about health in older age, but only 22 percent consider long-term health when making lifestyle decisions.

Shouldn’t everyone be taking these steps? As a retirement researcher, I’d love to see all of these survey responses closer to 100 percent.

Boomer: How can employers help workers prepare for older age?

Collinson: Employers play a crucial role by offering employer-sponsored retirement benefits such as 401(k) or similar plans, which have proven to be highly effective at helping employees save through the convenience of payroll deduction and access to institutional investments and advice – and often with matching contributions.

In addition to offering retirement benefits, employers can help their employees achieve financial security and prepare for older age by offering health and non-retirement benefits, workplace wellness programs, flexible work arrangements to promote work-life balances, retirement planning and counseling services, phased retirement alternatives – and fostering an age-friendly work environment in which workers of all ages are valued and can be successful.

While it might sound like I’m stating the obvious, employers can offer best-in-class programs, but their employees must enroll in them in order to benefit from them. If you aren’t familiar with your employer’s offerings, take some time to learn about them and determine which might be right for your situation.

Boomer: Do these three generations share the same retirement fears?

Collinson: Across generations, approximately half of workers fear outliving their savings and investments. Baby Boomers (49 percent) and Generation X (48 percent) are more likely to fear a reduction in or elimination of Social Security, compared with Millennials (39 percent). Baby Boomers (49 percent) are also more likely to fear declining health that requires long-term care, compared with Generation X (41 percent) and Millennials (36 percent).

These fears are not irrational. Many people are at risk of outliving their retirement savings. Social Security is in need of reform. For individuals and families, the possibility of long-term care is frightening from both a quality of life and a financial perspective.


With that said, by engaging in retirement planning, doing our homework, and safeguarding our health, we can mitigate these risks. While we can’t eliminate these risks altogether, we can and should be doing more to protect ourselves.