“Generation X workers report that the biggest deterrent to plan participation is, “I have too much debt to pay,” the Natixis report says.
Goodsell says advisors should tell Generation Xers that using the catch-up provision “is one of the simple things you can do to make your retirement plan work.”
Boomers, a quarter of whom have begun taking retirement fund withdrawals, also have shortfalls.
But unlike younger workers, boomers believe it will take more savings to retire, about $1 million, the study says. Yet like younger workers, they underestimate what it will cost.
The study said boomers realize that late in their careers “they’ll have to work at least two years past the standard Social Security age of 67.”
Even if they are realistic about these critical considerations, “many miss on the other side of the equation,” the report said. “They need seven-figure savings to fund retirement, but a few short years out from retirement age, they’ve only saved 30 percent of their goal.”
Still, about half of boomers say they will be comfortable in retirement “if they watch their spending.” But 22 percent said they are struggling in retirement and “10 percent said they will never be able to retire,” according to the study.
What should boomers do?
To achieve a secure retirement, the average baby boomer needs to work a few extra years and save $142,357 annually until age 69, Goodsell says.
Generation Xers have a similar kind of golden years worry. Only about one in five said he or she was saving enough for retirement “to lead the life they desire,” according to the study.