The stark differences between baby boomers and millennials when it comes to retirement savings are becoming more apparent as time goes on. Despite the general guideline of saving at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67, many boomers are falling short of these targets.

According to a 2024 national Transamerica survey, boomers have a median of $194,000 in all household retirement accounts, while millennials have saved $50,000. This may seem like millennials are behind, but considering the roughly 30-year age difference between the two generations, millennials are actually ahead in terms of retirement savings.

There are several reasons why boomers are struggling to save for retirement. One major factor is the shift from pensions to 401(k)s. Boomers were unprepared for this change and missed out on crucial savings during the early years of 401(k)s. Additionally, the impact of the Great Recession hit boomers hard, causing many to tap into their savings early and stunting long-term growth.

On the other hand, millennials have benefitted from more time to save, better financial education, and auto-enrollment features that make saving for retirement easier and more consistent. Surveys have shown that millennials are more confident in their ability to meet retirement goals compared to boomers.

Of course, no retirement savings discussion would be complete without acknowledging that unless Congress intervenes, the Social Security Trust Fund will be depleted in 2034, if not sooner, resulting in a 20-25% cut to every Social Security check.  For many, that would be a devastating financial situation.  Just something to keep in mind as our elected leaders continue to ignore this extremely serious matter and try to buy your votes by promising additional spending that the U.S. simply cannot afford.

Overall, each generation faces unique challenges and opportunities when it comes to securing a comfortable retirement. No matter what generation you belong to, financial education and early planning are key to ensuring a secure financial future in retirement.