Like with music, pop culture, and politics, members of different generations tend to approach issues differently than others. Generations also approach retirement differently—both in how they are planning for retirement, along with their expectations about retiring. Some generations are more optimistic about retiring at an earlier age, while simultaneously changing their retirement strategy based on economic and technical changes—like incorporating cryptocurrency into their investments. With over 60 million people currently planning for retirement as active 401(k) participants, it is important to discuss these differing strategies, how people feel about retirement planning, and how estate planning attorneys can provide additional advice to make people feel more secure.
Expectations About Retirement Age
Studies have shown a difference in opinion on when individuals in each generation expect they will be able to retire. Younger generations, like Gen Z, expect to retire at an earlier age than other generations. For example, the median age that Gen Z believes they will stop working at is 57 years old; however, Generation X—individuals between the ages of 42 and 57—do not expect to retire until they are 64 years old.
Despite this information, only 57 percent of all Gen Z members believe they will retire at some point—indicating a significant difference in opinion among people in this generation—whereas 62 percent of millennials believe they will retire at some point.
Retirement Plans Differing by Generation
While most individuals in all generations are planning for retirement, they are doing so in different ways. For example, Generation X and baby boomers plan to rely upon Social Security benefits, 401(k) and pension plans to support themselves. While members of younger generations do not assume that Social Security and Medicare will be available for them by the time they expect to retire, as many officials predict that Social Security benefits will be depleted by 2030. Because of this, millennials and Gen Z plan to rely more on their 401(k) savings as their major source of retirement income. However, younger generations also plan on relying on financial technology within their investment portfolio, like cryptocurrency. Many members of this generation believe that cryptocurrency will give them the highest return on investment, despite its current lack of regulation and potential volatility.