Gen X and Y Investors Worry Retirement Savings Won't Be Enough

Harris Interactive conducted the online study on behalf of T. Rowe Price in December among 860 adults, comprising Generation X (ages 35 to 50) and Generation Y (ages 21 to 34), who had at least one investment account.

A detailed retirement plan might include the following components, the study found:

• 77% of those with a plan said it targets an anticipated monthly budget;
• 84% cited having a specific monthly withdrawal strategy;
• 78% said their plan considers life expectancy and how long their savings might need to last.

Generation X and Generation Y investors said they expected to receive retirement income from multiple sources, most commonly:

• 401(k)s or other workplace retirement plans, 74%;
• IRAs, 65%;
• Non-retirement accounts (e.g., checking, savings, stocks, bonds, mutual funds), 64%;
• Social Security, 63%.

"Younger investors' confidence in the Social Security system was surprisingly positive," Fahlund said. "Still, it shouldn't be relied upon too heavily. Investors need to consider it as only one source of retirement income and make sure they are contributing to their retirement through other accounts."

Study participants said they expected to retire at the mean age of 62, and anticipated living 22 years in retirement. Fahlund said the latter number was a significant underestimate.

"Many people will live well beyond 22 years in retirement," she said. "To be adequately prepared financially and to ensure they don't outlive their money, we suggest that investors annually save at least 15% of their salary, including any available employer match, and consider a possible retirement of 30 or more years, to age 95."