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How Boomers and Generation Xers Are Facing the Retirement Crisis


How Boomers and Generation Xers Are Facing the Retirement Crisis.png

Written by: Katie LibbeAllianz Life

Today, few Americans can count on pensions and similar sources of once reliable retirement income. At the same time, increasing life expectancies mean longer retirements and the risk of outliving retirement savings.

Allianz Life Insurance Company of North America (Allianz) commissioned the Allianz Generations Apart Study to better understand the different challenges baby boomers (ages 49-67) and Generation Xers (ages 35-48) face as they prepare for retirement.

Boomers and Gen Xers agree there is a retirement crisis – but there are generational differences in how they’re responding.

An overwhelming number of boomers and Gen Xers agree there is a retirement crisis (84% and 92%, respectively), and both groups reported being heavily impacted by the 2008 crash. And although both groups see themselves as being hit harder by the recession, both generations agree that it’s been much harder for Gen Xers to keep a job or plan for retirement.


When it comes to debt – and their comfort with debt – boomers and Generation Xers seem worlds apart.

Our study found that Gen Xers generally are carrying higher debt, and appear to be remarkably complacent about its implications for their financial future. In addition, more Gen Xers are seeing debt as a necessary way of life. One in five believe that going into debt to handle day-to-day purchases is “just a fact of life” versus only 14% of boomers. These attitudes are also evident in how each generation approaches long-term financial planning. When asked which financial philosophy they preferred, half of Gen Xers said “enjoy and live for today” versus only 39% of baby boomers, with the majority of boomers (61%) choosing “save and plan for tomorrow.”


2008 market crash still greatly impacts Gen Xers and boomers.

The effects of the 2008 market crash have been even more profound for a distinct segment of respondents identified as “post-crash skeptics.” This group appears to suffer from a significant psychological impact on their financial attitudes and behaviors, including lost confidence in financial institutions and a switch to more conservative investments. An overwhelming 93% of post-crash skeptics – which includes a cross-section of Gen Xers and boomers who experienced six or more major effects of the crash – said the 2008 crash still haunts them today.


1Post-crash skeptics are comprised of Gen Xers and boomers who’ve experienced six or more major effects of the 2008 financial crash.

Although these results may be disheartening, the good news is that both generations do believe it’s critically important for them to build their financial security in retirement (94% of Gen Xers and 95% of boomers).

Gen Xers overwhelmed about their financial future and want empathetic, nonjudgmental support

Most Gen Xers believe they will need to build their own financial security in retirement but are bogged down by uncertainty whenever they think about it. Because of this, Gen Xers are not taking action to secure their financial future and have their heads in the sand. This inaction is happening despite the fact that they are doubtful that pensions, Social Security and Medicare will be there for them and that they will have enough saved to stop working. Financial professionals can play a key role in helping Gen Xers build a solid financial future and clear up misperceptions. In seeking a financial professional, Gen Xers report that they want to work with someone who doesn’t judge their financial choices and is empathetic to their actual life situation.


Online Financial Advice Growing in Popularity, But Gen Xers and Boomers Still Appreciate Personalized Help

Despite the growing popularity of online financial advice (known as robo-advisors), personal relationships with human advisors remain important for many Americans, particularity Gen Xers and baby boomers. With more robust technology available today, people are getting more comfortable with some aspects of online financial planning. However, both generations preferred having access to financial professionals who can address their specific needs beyond asset allocation and accumulation, and can shift their recommendations as personal circumstances change.

Personal relationships overwhelmingly preferred over robo-advisors

Major study findings

1. Romantic fantasy of the past

82% of boomers and Generation Xers agree that a traditional retirement is a romantic fantasy of the past. More than eight in 10 (84%) from both generations said they feel that a retirement starting at age 65 spent “doing exactly what you want” is now unrealistic.

2. Disadvantaged Gen Xers

Gen X respondents were much more hopeless about their ability to achieve retirement goals and about their overall financial situation than were their boomer counterparts. Although each generation feels their circumstances have been tougher to manage, Gen X respondents indicated stronger feelings about the extent to which they feel burdened and disadvantaged by their reality. More than two thirds (67%) of Gen Xers agreed with the idea that supposed targets for how much you need to retire are way out of reach versus less than half of boomers (49%).

3. Warped reality

Despite clear concerns about their financial situations and prospect for a comfortable retirement, both generations are surprisingly relaxed about planning for their financial futures. An astounding percentage of boomers (65%) and Gen Xers (53%) said they “just have this feeling that everything’s going to work out.”

4. Increasing comfort with debt

Living with debt has become a way of life for both Gen Xers and boomers as the stigma of owing money is gradually disappearing. Nearly half (48%) of both generations agree that credit cards now function as a survival tool. However, Gen Xers reported carrying about 60% more mortgage debt than their boomer counterparts. Even worse, Gen Xers have an alarming 82% more nonmortgage debt (student loans and credit cards) than boomers. This growing comfort with debt may be having a greater effect on their retirement plans. Twice as many Gen Xers (27% versus 11% of boomers) say they are either unsure about when they plan to retire or donít plan to retire at all.

5. Emergence of “Post-Crash Skeptics”

A significant number of respondents indicated that they’ve experienced post-crash economic trauma, including having their home or 401(k) going down in value, having them or a family member lose a job, or having their savings and/or retirement planning affected by the crash. One in five (20%) of all respondents indicated they experienced six or more of these events, identifying them as post-crash skeptics. More than two-thirds of post-crash skeptics (67%) said they changed their view of the market to risky (versus 32% of the total respondents). Additionally, 43% said they switched to more conservative investing or financial products (versus 22% of the total respondents), a fact that may adversely impact their ability to effectively save for retirement.

6. Empathetic support clears up uncertainty

The majority of Generation X (92%) feel that Americans are in the midst of a national retirement crisis, and an even greater number (94%) believe it’s critical to build their own financial security. But, 64% of Gen Xers get bogged down with uncertainty whenever they think about retirement, so they don’t take any action. Seventy-two percent feel it is almost impossible to figure out what retirement expenses are going to be, and yet there is some delusion about retirement – more than half (55%) see themselves having a relaxed, easy time of it in retirement. Financial professionals can help Gen Xers plan for a solid financial future if they know what this generation is looking for. Sixty-seven percent of Gen Xers are willing to delegate financial decisions to their financial professional, but the majority (64%) are looking for someone who makes recommendations that reflect their actual life and choices, not some ideal.

7. Personal relationships with human advisors are crucial for Gen Xers and baby boomers

When asked about engaging robo-advisors, nearly seven in 10 (69%) from both generations indicated they “don’t really trust online advice, making personal relationships more important.” More than three-quarters (76%) believe “there’s so much selling online that it’s hard to trust the financial advice.” While more than a third (35%) of respondents said they have some interest in working with a robo-advisor (46% Gen X, 24% boomers), only 10% said they would be comfortable having their relationship with their financial advisor exist entirely online.

Study methodology

The Allianz Generations Apart Study, fielded by Larson Research and Strategy Consulting, was a nationwide online quantitative survey of 2,000 U.S. adults ages 35–67 with a minimum household income of $30,000. The sample was designed to achieve a 50/50 balance of men and women, and a 50/50 balance of boomers and Generation Xers. The margin of error is +/- 3%.

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