The United States Department of Labor (DOL) defines baby boomers as those born from 1946 to 1964, and generation-Xers as those born 1965-1979. As is expected from individuals who are close in age, there is similarity in retirement attitudes among these two generations. However, there are also differences, some of which have led to different levels of retirement readiness and retirement savings.

In order to make a reasonable comparison, it is sometimes necessary to divide the baby-boomer cohorts into two groups, which has been done when available data allows.

Retirement Savings Attitude and Results
In its 2011 Retirement Confidence Survey (RCS), the Employee Benefits Research Institute (EBRI) compared the attitudes towards retirement savings and amounts actually saved by age. Some of its findings are included in the following table.

Early Boomers
1946 to 1955

Late Boomers
1956 to 1964

Gen-X
1965 to 1979

Percentage of workers saying they've saved for retirement 76 69 70

Percentage of workers who've tried to calculate
how much money they'll need for retirement

53 47 39 Reported total savings and investments of $250,000 or more 19 15 9 Reported total savings and investments of $100,000 - $249,999 22 12 15 Reported total savings and investments of $99,999 or less 60 72 76

Source: 2011 Retirement Confidence Survey - 2011 Results http://www.ebri.org/surveys/rcs/2011

The fact that early boomers have the largest percentage of individuals with more than $250,000 saved is no surprise, as older individuals are more likely to have larger amounts saved because they have worked longer and have had more time to accumulate those savings. Notwithstanding, it begs the question of whether this is enough to meet their retirement income needs.

Boomers Have Lower Retirement-Readiness Confidence
While a large percentage of respondents say they have saved for retirement, the level of confidence that this savings is sufficient to meet their retirement income needs is low and is critically so for boomers. According to a report from the Insured Retirement Institute (IRI), 63% of baby boomers lack full confidence that they will have enough money to cover their retirement needs, whereas only 33% of generation-Xers fall into that category.

This concern is not unfounded considering that individuals age 55 may need up to $550,000 for men and $654,000 for women to cover health insurance premiums and out-of-pocket expenses in retirement when they reach age 65 in 2018.

Generation X More Willing to Take Investment Risk
Compared to baby boomers, generation-Xers are more likely to take above-average risk when investing their retirement savings. Baby boomers are more likely to choose average risk in return for average gain with a large percentage unwilling to take any risk at all. Since the amount of return on investments is often determined by the amount of risk the investor takes with his or her assets, this approach will ultimately affect how much the members of each group invest based on such levels of risk tolerance.

Boomers Withdraw More and Add Less
According to the IRI, the economy significantly affects people's retirement-saving plans. With widespread layoffs and dim job prospects, about 15% of generation-Xers have had to dip into their retirement savings to cover everyday living expenses and 23% have stopped contributing to retirement accounts. Along the same vein, 20% of baby boomers have made early withdrawals from their retirement accounts and 32% have stopped contributing.

The Bottom Line
It is expected that individuals who are closer to retirement will have a more realistic view of retirement readiness. As such, it should not be surprising to find that more baby boomers are concerned about financial security during retirement than generation-Xers. Nonetheless, one's retirement readiness is often determined by one's attitude towards retirement and the actions that one takes towards saving for retirement.

Regardless of age, individuals can get themselves out of this statistical rut by improving their attitudes and taking more positive actions towards saving and planning for retirement when possible.

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