Data and Research April 15, 2015

Gen X More Worried About Retirement than Boomers

More Gen Xers than Baby Boomers surveyed agreed they are solely responsible for their retirement.
Reported by

When it comes to retirement preparation and investing, members of Generation X (ages 35 to 49) tend to be more worried than Baby Boomers (ages 50 to 68), a PNC Financial Services Group survey finds.

Three quarters (73%) of Generation Xers agreed with the statement “I worry that my savings may not hold out for as long as I live,” as opposed to 55% of Boomers. Eighty-four percent of all survey respondents fear that health care costs will be too expensive in retirement, topping the list of all concerns among respondents. Generation X is slightly more worried than boomers (89% vs. 83%).

Get more!  Sign up for PLANSPONSOR newsletters.

The survey showed that while only one in seven (15%) survey respondents are still coping with the effects of the Great Recession, seven out of 10 changed their financial behavior as a result. A majority of Gen X (51%) say they are saving more for retirement, compared to 37% of Boomers.

In PNC’s survey of 1,017 adults with investable assets of at least $50,000, 65% of Generation Xers responded “I believe I am solely responsible for my retirement (no Social Security, employer pension, inheritance, etc.),” versus 45% of Boomers. Generation X expects to need an average of $1.5 million for retirement while Baby Boomers’ average expectation is slightly lower at $1.3 million. However three-quarters (74%) of Boomers have yet to reach the $1 million milestone.

Still, respondents expect Social Security to be there for them. Ninety-four percent of all survey respondents agreed “I have earned my Social Security through paying Social Security taxes and therefore it is owed to me.”

The survey also found nearly all (95%) respondents said “it (is/was) very important to me to be able to retire when I (choose/chose) to do so.” Generation Xers expect to retire younger at an average age of 63.6 years while Boomers expect to retire, on average, at 65.5.

Many of those surveyed know that their 401(k) or comparable plans will not be enough to get them over their retirement savings goal. On average, respondents invest 11% in their employers’ retirement plan and another 9% (on average) specifically for retirement outside of these plans. Of those who participate in a 401 (k) program at work, seven in 10 are offered an employer match, and nine in 10 say that an employer match is important to overall retirement savings.

The “Perspectives of Retirement Survey” was conducted online within the United States February 13 through 25, 2015, among a nationwide cross section of 1,017 adults ages 35 to 75, with total investable assets of at least $100,000 if age 45 or older, and at least $50,000 if ages 35 to 44.

Administration April 15, 2015

CalPERS Adjusts Contributions for Increased Longevity

"As the fund matures, and the retired population grows, it's important that the rates reflect the changing demographics of our members," says Richard Costigan, chair of the CalPERS Finance and Administration Committee.
Reported by

The California Public Employees’ Retirement System (CalPERS) Finance and Administration Committee recommended the Board of Administration adopt new pension contribution rates for State of California and school employers that are less than originally projected, but up from the 2014-15 Fiscal Year (FY).

The changes in the rates for the 2015-16 FY are driven primarily by payroll growth, salary increases, and retirees living longer.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The state’s contribution towards pensions is estimated to increase by $487 million from $4.2 billion to $4.7 billion from the previous fiscal year, while the estimated increase for the schools pool will rise to $111 million from $1.2 billion to $1.3 billion.

The CalPERS Board has adopted several actions to reduce risk to the fund and ensure long-term stability, including new demographic assumptions in 2014 and a change to amortization and smoothing policies in 2013.  

The state contributions are increasing due to the second year of the new phased-in demographic assumptions that account for public employees living longer; the implementation of the new smoothing policies, and because the payroll of state employees covered under CalPERS has increased by about 7% over the previous year. The schools pool contribution is increasing as a result of the new smoothing policies and also as a result of an increase of about 8% in the payroll of school employees covered by CalPERS. School rates will reflect the new assumptions beginning in the 2016-17 FY.

“As the fund matures, and the retired population grows, it’s important that the rates reflect the changing demographics of our members,” says Richard Costigan, chair of the Finance and Administration Committee. “Pension plans require stable funding, and the new rates incorporate the Board’s actions over the last several years that will reduce rate volatility in the long term.”

The state pension plan is approximately 72% funded, while the school plan stands at approximately 86%, as of June 30, 2014. This represents an approximately 6% increase for both plans over the previous fiscal year. The total CalPERS Fund is estimated at 77% funded as of June 30, 2014. 

«