Gen Xers Perspectives on Retirement

How do Gen Xers Feel About Their Retirement?

In a couple of weeks, n-gen will sit on a panel at a benefits and disability management conference hosted by the Conference Board of Canada. While we are not experts in either areas of creating benefit plans or managing disabilities, we know the prevailing perspectives the four generations hold as they relate to retirement. While Traditionalists would have been grateful for the creation of the Canada Pension Plan which they believed would be a mechanism to secure or at least aid in their retirement, Gen Xers don’t believe that there will be any money left for them to access.

Getting Shafted by Demographics

The skepticism which is an inherent trait of Gen Xers often has to do with the size of the generation that precedes them. Given the size of the Baby Boomer population and their ability to control both organizational and political agendas, many Gen Xers do not believe their future is being considered. This skepticism has been given fuel by changes being made – many organizations have gotten rid of defined benefit plans and the CCP reform debate which proposes to raise the cap on contributions.

In both situations, it is Gen Xers who are negatively affected. Many Baby Boomers are grandfathered under the benefit plans, and the raise on contributions means that Gen Xers and Gen Ys will have to pay more for longer period of time than working Boomers, seemingly without a guarantee that Gen Xers will be able to reap the rewards.

Bombarded by Message Reinforcement

Gen Xers were not born a skeptical generation. Society through the medium of the media have either helped to shape or even create our perspective. In our teens and twenties, we were being told that we would never be as successful, and would never own as much stuff as our Baby Boomer counterparts. Now, we are receiving the message that we are being far too optimistic as it relates to home ownership and retirement.

Gen Xer and Gen Y Optimism Dashed Against the Rocks of Reality

Bank of Montreal Wealth Management Institute released a report earlier in 2014 that detailed perspectives held by Gen X and Gen Y. In the report:

• 2/3 thirds (68%) of Gen X and Gen Y believe they will be able to buy a house at some point in time
• 70% will be able to pay for their children’s post-secondary education
• 65% believe they will be able to ‘retire comfortable’ and intend to retire two years earlier (at 61 years of age) compared to the older generation

Most of the articles (written by various sources) that comment on these statistics state that Gen Xers and Gen Ys are being overly optimistic. Mostly, the articles detail statistics to highlight the odds against achieving these goals, ranging from unlikely to inconceivable. All of these messages only further underpins for Gen Xers that we need to continue to maintain our independence, both professionally and financially. The ability to retire will be solely dependent on our own efforts.