August 12, 2021
Generational Views of Retirement in the United States
|The ongoing COVID-19 pandemic has presented extraordinary health and economic challenges across the globe, triggering yet another deep economic crisis. While the availability of several vaccines in late 2020 has begun to alleviate health and economic issues, the economic fallout from the pandemic may create substantial uncertainty about financing retirement that could trigger Americans to work longer or rethink retirement. Even before the pandemic, many workers still were recovering financially from previous economic downturns. Simultaneously, the past several decades have seen dramatic changes to the U.S. retirement system. A broad body of research finds that most Americans are not on track for a secure retirement. Different generations face distinct challenges when it comes to retirement. The Silent Generation had broad access to defined benefit pension plans, but faces growing health and long-term care expenses in retirement. Baby Boomers are transitioning into or approaching retirement and a large share are expected to face financial hardship in retirement. Generation X was the first generation with 401(k)s as their primary retirement vehicle, and also face high expenses as the “sandwich generation.” And Millennials face a deeply troubling retirement outlook stemming from factors like depressed wages, high college debt, and the lack of participation in employer retirement plans. Further complicating retirement is growing financial asset inequality among Americans, with inequality growing across generations. Against this backdrop, this issue brief examines national sentiment of various generations about retirement, each of which is face differing circumstances. This research finds that: • Millennials and Generation X are most concerned about the impacts of COVID-19 on their retirement. Across generations, most of those who are concerned about the impacts of the pandemic plan to delay their retirement.
· There is generational agreement that the U.S. faces a retirement crisis, with Millennials and Generation X most pessimistic about retirement.
· There is broad support across generations for Social Security, including support for increasing contributions and expanding benefits.
· All generations have favorable views of defined benefit pensions, with Millennials holding the most favorable views.
There is wide agreement generationally that pensions are better than 401(k) plans for providing retirement security, and that everyone should have a pension.