Gen X may lose out in retirement

By Siobhan McDonough
Associated Press

WASHINGTON — Baby-boom and Generation X households, headed by someone 25 to 34 years old, have greater accumulated assets — and more debt — than current retirees had at the same age, congressional auditors said yesterday.

Workers in those groups are likely to have similar levels of retirement income in real terms, but it might not support Generation X's future living standards, according to the General Accounting Office report.

Baby boomers were born between 1946 and 1964; those in Generation X were born between 1965 and 1976.

Those groups' levels of retirement income depend in part on their behavior, such as how long they work and how they save, the GAO said. Factors they can't control, such as the economy, also will play a role. Social Security trust funds are projected to be exhausted in 2042, at which point they would be unable to pay scheduled benefits in full.

Today's workers are saving a smaller proportion of their incomes than did earlier generations — too little to maintain their living standards and meet greater healthcare costs in retirement, the GAO said.

Further strains might come from greater life expectancy, giving younger workers more years in retirement.

Most of the large increase in assets since the current retirees' era is due to increased home ownership and equity, the report said.

Generation X workers will have similar levels of retirement income — Social Security benefits, asset income, pension benefits and earnings — adjusted for inflation at age 62 as their baby-boom counterparts, the report found. But they may not be able to replace a corresponding percentage of their pre-retirement incomes.