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generations: Silent Generation (ages 63 to 83), Boomers (ages 44 to 62), Generation X (ages 32 to 43), and Generation Y (ages 21 to 31). According to Charles Schwab, founder, chairman, and CEO of the Charles Schwab Corporation, the study results reveal that people are rethinking the old model of retirement. On average, people believe ‘old age’ doesn’t begin until 75 or older. With the average retirement age now in the early 60’s, Americans are reasonably planning for upwards of 30 years in this stage of life.
How We View Retirement— “Me” Versus “We”
According to the study, the new thinking about retirement shows that nearly half (45%) of survey participants see retirement as a time to give back to their families and communities. This may be due in part to see- ing a gap of potentially productive years between retirement age, which participants define as 63, and “old age,” which they say does not start until around 75. People who view retirement as a time to give back are more likely to believe they will stay youthful longer and that success is about having loving family and friends.
A Schwab company news release dated July 15, 2008 summarized the survey findings as follows:
1. Respondents are thinking about their retirement futures and say they will need to have saved at least $500,000 to live comfortably in retirement, which is twice the median net worth of today’s Boomer pre-retirees. Additionally, only a quarter of Americans say they clearly understand Social Security and how it works. Just 11% of Americans say they understand Medicare very clearly.
2. Looking forward, survey participants identify a need for self-reliance in retirement. Younger generations, especially, see larger parts of their retirement funds coming from personal savings and investments. Generation Y (ages 21 to 31) expects 61% of its retirement funding to come from personal savings and investments versus 32% from the oldest generation (ages 63 to 83).
New Views About Retirement