Monday, May 20, 2013

Downward Mobility for Generation X

Add another item to the long list of troubles plaguing Generation X. The way things are going, according to a new study, Gen Xers will be forced to make do in retirement with only 50 percent of their pre-retirement income. Financial planners recommend a replacement rate of at least 70 percent for a comfortable retirement.

The Economic Mobility Project estimated median replacement rates by generation based on projected household net worth plus the value of annuitized assets such as pensions and Social Security and assuming a retirement age of 65. As you can see, the projected income replacement rate of Generation X is well below the rate for older generations...

Generation X (born 1966-1975): 50%
Late Boomers (born 1956-1965):  59%
Early Boomers (born 1946-1955): 82%
War Babies (born 1936-1945): 99%
Depression Babies (born 1926-1935): 86%

Source: The Economic Mobility Project, Retirement Security Across Generations: Are Americans Prepared for their Golden Years?

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