Gen X Women Confident About Retirement

November 12, 2003 ( - Generation X women are apparently taking an earlier and more proactive approach than their Baby Boomer counterparts.

Women of Generation X – those between the age of 24 and 37 – have already earmarked an average of $410,000 for retirement, a total that includes pensions and other company-sponsored savings plans. By comparison Baby Boomer females – those between the age of 38 and 57 – have an average nest egg of $451,000, even with an entire decade’s head start on their younger peers, according to the latest release of data from Allstate’s Retirement Reality Check study.

“These numbers tell us Generation X women are thinking about retirement at an early age and hopefully are willing to take the necessary steps, like meeting with a financial specialist, to prepare themselves,” said Casey Sylla, president, Allstate Financial.

The two categories though converge in their confidence of how much will be necessary to retire. A clear majority – 74% of Boomer women and 73% of Generation X women – responded they are confident they know how much money they will need in retirement. Generation X women on average expect to need $3,607 per month to cover basic living expenses during retirement. That compares with $3,657 cited by Boomer women; $3,287 cited by Generation X men, and $4,869 by Boomer men.

Some Trepidation

Thinking about retirement and actually reaching that age are two different things though as 40% of Generation X women polled consider the thought of retirement overwhelming, compared with only 23% of Boomer women. Specifically, 57% of the younger sample said they fear outliving their retirement savings, compared with only 46% of Boomer women.

Generation X women apparently are not too worried, as 29% said if they are not prepared for retirement they would rely on their children as a financial safety net after retirement, compared with only 17% of Boomer women that said the same. Generation X “assumes a form of a generational contract, proclaiming that, by bringing children into the world, they can rely on each other. This goes back to the family structure certain Generation Xers may not have experienced as children,” says Ann Fishman, president of Generational-Targeted Marketing Corp., a New Orleans-based consulting firm that focuses on generational issues .

Battle of the Sexes

The leadership characteristics carry over to the comparisons between Generation X’s men and women, as the male components of Generation X have only earmarked an average of $248,000 for retirement. By comparison, Baby Boomer men have earmarked $564,000, on average, for retirement.

With such a nice bankroll, it comes as no surprise that Generation X women also say they are as confident as their male counterparts in making investment decisions. Seventy-one percent of Generation X women surveyed say they are confident in making investment decisions, compared to 70% of Generation X men.

“Gen-X women see themselves as financial equals and are sending a clear signal that they know they need to be self-reliant,” said Fishman. “They don’t assume they’ll marry, and even if they do marry, they assume they’ll share the financial responsibility.”

Allstate created the survey in conjunction with Harris Interactive. Harris Interactive polled 1,474 people born between 1946 and 1979, with household incomes of $35,000 and more.