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Extension service news: Younger generations will have difficulty retiring

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By Judy Hetterman

Although the Great Recession is considered over, many Americans are still struggling. For younger generations, the financial struggle may last through retirement. According to a recent study by the Pew Charitable Trusts, “early boomers (born 1946-1955) may be the last group on track to retire with enough savings to maintain their financial security through their golden years.”  They are wealthier than previous generations. However, late boomers and younger generations do not appear to be on track for a comfortable retirement.  Late boomers (born 1956-1965 have lower net worth even than Gen Xers (born 1966-1975), and neither generation has as much as early boomers had at their age.  When we consider that Generation X was hardest hit by the Great Recession, we may find that they have the most to do to catch up and retire comfortably.
So how bad is it?  According to Market Watch, typical Gen Xers may have to retire on half of their pre-retirement annual income.  Late boomers may have only 59 percent of their previous annual income in retirement.
Early boomers, on the other hand, are on track to have 82 percent of their pre-retirement income each year in retirement. It appears that they will be ready.
Younger Americans must learn to live on less and save and invest a larger proportion of their incomes in order to have enough for retirement.
While recession, underemployment and unemployment take a lot out of a worker’s ability to retire comfortably and on time, beginning to save and invest early in life is the best thing you can do to prepare.