On a special episode (first released on October 9, 2024) of The Excerpt podcast: From Gen Z to the Silent Generation, Americans are approaching building their nest egg in vastly different ways. Boomers feel unprepared, while Gen Xers worry they're behind schedule, and Millennials – who are navigating student loan debt on top of rising housing, child care and education costs – are feeling the squeeze. USA TODAY Personal Finance Reporter Daniel de Visé and Money Reporter Bailey Schulz join The Excerpt to share their findings in this first of four specials exploring how different generations are handling life’s pressure points.

Hit play on the player below to hear the podcast and follow along with the transcript beneath it. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.

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Dana Taylor:

Hello, and welcome to The Excerpt. I'm Dana Taylor. Today is Wednesday, October 9th, 2024, and this is a special episode of The Excerpt. From prep to panic, retirement expectations in America have become, well, complicated and differs greatly by generation. While Boomers are anxious about having enough put away to finally get out of the rat race, Gen Z is said to be healthy savers ahead of their time. Can understanding the lens through which we talk about retirement help us plan for and navigate this phase of our lives more successfully? To dive into the issues here, I'm joined now by USA TODAY finance reporters Daniel de Visé and Bailey Schulz, part of a network-wide team exploring how generational divides define our thinking on and approach to various cultural facets of life. Daniel, Bailey, thanks for joining me on The Excerpt.

Bailey Schulz:

Thank you for having us.

Dana Taylor:

Bailey, I want to start with you here. Before the Boomers who are currently in the process of retiring en masse, there was the Silent Generation, a generation who largely was able to enjoy retirement on generous pension plans provided by the places they worked for 30, 40, 50 years. Then American companies sort of pulled the plug on offering pension plans. How did this generational change impact how Boomers planned for their retirement?

Bailey Schulz:

Yeah, so like you said, we saw this shift away from pensions toward 401(k)s in the 1980s. I think that has really affected these trends within the generations and how they are saving for retirement. So there was a recent report from Morningstar that found that that sort of shift has left Baby Boomers and Gen X with just less time to accumulate savings for retirement.

Dana Taylor:

Bailey, the COVID pandemic happened at a critical time for many workers, but especially Boomers, who were hoping to retire relatively soon and then suddenly many were forced out of the workforce early. Have you found that they've mostly recovered?

Bailey Schulz:

So there was a recent survey by Goldman Sachs, and they found that as for Boomers, about half feel behind on their savings and half say that part-time work will be important to their retirement income strategy. And so that's what we found in our reporting where I spoke to Baby Boomer who is planning to retire within two years, but she will be taking on work here and there when she can. Same with her husband. And so yeah, I think that is just the approach that we're seeing quite a bit of Baby Boomers take to get themselves through retirement.

Dana Taylor:

Daniel, a lot of Gen Xers had their retirement plans also scuttled by the pandemic. Many in their forties and fifties were hoping to channel money earned during their peak earning years into retirement savings. How have they been faring?

Daniel de Visé:

Well, I would say that Generation X has been pummeled by a bunch of different economic crises. I'm a Gen Xer and it's the group that was kind of entering their prime right when the Great Recession hit. So that took an enormous toll in terms of their employment, in terms of them building retirement savings. And a lot of Gen Xers too survived the dot-com bust at the turn of the millennium. For a lot of us, that was when we were first getting into the profession. And then COVID. We haven't seen the stock market just go up, up, up, up like some older people did. And so that's kind of where we're at. I think Gen Xers don't have the same sort of confidence in the economy and in the stock market and in their ability to build savings that maybe older folks did.

Dana Taylor:

Daniel, are there other unanticipated factors impacting Gen Xers with their retirement plans?

Daniel de Visé:

Well, I wrote about gray divorce for USA TODAY earlier in the year, and that story went bananas. This is people in their fifties divorcing. What's happening is their kids get out of school and then somebody pulls the trigger on a divorce, and I'm seeing it in my own community and we're seeing it a lot around the country, just older people divorcing. As it happens, two people in our story, they both went through gray divorces, or sort of midlife divorces, and it's particularly ruinous for women, for the spouse who was the wife, basically, because oftentimes traditionally the woman in the partnership is less likely to have earned money consistently during the marriage. And so when the partners divorce, I said this in my article, the woman ends up much worse off financially relative to, the guy doesn't do well either, but the woman does worse.

Dana Taylor:

Higher socioeconomic status of course plays a big role in how a lot of people across generations plan for retirement. Economically, Boomers had a lot of advantages than other generations, later generations, in terms of interest rates, inflation, housing, the list goes on. Yet some have accused the Boomers of climbing the corporate ladder only to pull it up behind them, preventing younger generation from accessing the same opportunities, including higher paying jobs that would've made retirement planning easier. Daniel, is there any truth to this perception?

Daniel de Visé:

No, I don't think Boomers pulled up the ladder. Boomers were hippies, a lot of them. I don't think a lot of them were super, super competitive or driven to succeed. I think what happened was home prices have gone just crazy in the last bunch of years, so younger people, especially in the last 10 years, feel crippled in their ability to buy houses. Now, that was something the Boomers were able to do pretty easily. Also, the decline of pensions, which we mentioned earlier in this conversation, that happened during the Boomer Generation. So a lot of Boomers actually do have, I've got a couple of pensions. I'm a Gen Xer. So Boomers actually have it a little easier in terms of it's more likely they have a pension and the younger generations are much less likely to have one. And then again, the Boomers, while they were affected by the Great Recession, it came later in their careers. So researchers have sort of proven that they didn't get hit as hard, the Boomers didn't, by the Great Recession. The younger folks, the Gen Xers and the Millennials, were the ones who were really buffeted by that.

Dana Taylor:

Some of the challenges we're talking about really come down to dealing with unexpected shifts, the Great Recession, the pandemic, now the worry about AI making many jobs obsolete. Bailey and then Daniel, I'd like you both to talk about how you see resilience playing out generationally. Bailey, I'll start with you.

Bailey Schulz:

So one thing that jumped out to me was just the trends that we're seeing among Gen Z, the young generation who's just really starting to dip their toes into retirement savings. And what they told me is that they're really learning from previous generations and seeing what they faced with the Great Recession, with the pandemic, and starting to really wanting to lean into savings early to prevent some of those financial hardships. And so as far as where that generation stands, we see one study from BlackRock that cites the Gen Z generations as a group of savers ahead of their time. And so I think that's what we're seeing as a trend with that sort of younger group of savers.

Dana Taylor:

And Daniel, what are your thoughts here?

Daniel de Visé:

Well, I think the resilience of the younger generation derives from this hardship I was talking about. Again, the Gen Xers, like myself, we went through the Great Recession, we went earlier through the dot-com bubble, and we've been through COVID. So we and the generations beneath us, the Millennials, I think that makes us more resilient. Again, we don't expect the stock market to go up by exactly 10% every single year. We expect it to go down and sometimes for three, four years in a row. I think that very fact makes us more resilient. I did an article recently about how the youngins, they look into these alternative investments. They're not even necessarily investing in traditional stocks. There are these crypto millionaires. They're investing in individual companies based on what they think is progressive sort of corporate policies. So they have a sort of a outside the box way of thinking that probably the Boomers don't have.

And then just the other thing would be, because of COVID, the really young folks are kind of coming of age in this era when you move to Boise, Idaho, or one of these COVID boom towns, you've learned that your career can be mobile. You can pick up and move anywhere around the country. I think there's a real strength to that for the younger people. They're sort of arriving into the prime of their careers knowing that they could kind of live anywhere and have this really adaptable sort of approach to both working and parenting. I feel envious of them because my wife and I are really stuck in this old way of thinking that we're used to commuting and we couldn't just move. So we are here in D.C. But it's amazing to think you could go move to Las Vegas where Bailey is or anywhere and live your life there and work your job.

Dana Taylor:

We haven't talked a lot about Millennials yet. Daniel, many are worried about them from a retirement perspective that they really aren't prepared. What have you found?

Daniel de Visé:

Report after report show Millennials suffered just as Gen Xers did through the Great Recession. So they started out way behind, right? And so when you look at these retirement surveys, it shows the Millennials playing catch-up, but they're doing a good job of it. I would say that since the Great Recession, which is now, what, 12 years, they've done a admirable job of saving. Their sort of marginal rate of retirement saving is pretty darn good. They don't get a hundred percent of the credit for this. Companies are much more likely to auto enroll you in a 401(k) now, so you may not even think about it and lo and behold, you're invested in retirement savings with your money in an index fund.

As for the Millennials, the other thing is they've benefited from this booming housing market in the last several years. Millennials bought their first homes during this huge run-up in value. So lo and behold, their property's worth half again more than it was when they bought it, and they're thrilled about this. No group I would say maybe has benefited more than Millennials in terms of just getting this lift from the housing market in the last several years.

Dana Taylor:

Bailey, how is student debt playing a role in how the generations view and plan for retirement?

Bailey Schulz:

Yeah, I think that is a big one, especially for Millennials and Gen Xers, some of whom are still paying off loans at this point. I've seen surveys find that about half of those generations say that paying down loans is a major financial goal. And even more saying that paying down loans like student loans are affecting their ability to save for retirement. So I spoke to one Gen Xer for the story who wasn't able to pay off her student loans until she was in her forties. And so for people in this generation, a lot of times that is debt that is just lingering and really taking away money that could have been going towards their retirement savings.

Dana Taylor:

In thinking about how various generations approach and plan for retirement, what surprised you the most? Daniel, let's start with you.

Daniel de Visé:

I would say that the two women I interviewed who are close to my age and generation, what really surprised me about them both was they divorced not too, too long ago and were really starting from zero. And both of them have recovered amazingly, to the point where I believe they're both now more or less on track to retire with some kind of nest egg.

And that just blew me away because imagine your marriage falling apart and you find out there was way less than you thought there was saved up or coming your way in the divorce and you're starting from nothing. And then not too many years later, because these women are both very smart and very hardworking and have worked with financial planners, and lo and behold, they are more or less on track. And that really amazed me and made me really happy because there's a lot of people out there who have to start over again, maybe in the middle of their careers, in the middle of their lives, especially after a gray divorce. And it was just really heartening to see two really happy endings to that what could otherwise have been a really sort of life-altering event, basically.

Dana Taylor:

And then, Bailey, what surprised you the most?

Bailey Schulz:

I think for a story like this, there's always a mixed bag of what you see with retirement savings, where some people are really struggling to catch up, some are on top of it. But I was surprised by how optimistic I was by the end, especially for those younger generations where I spoke to 19-year-olds who already have Roth IRAs and are putting in money towards retirement. And that's nothing that me or my Millennial friends did back in the day when we were in college. And so I think we're seeing this younger generation of savers who have these resources and financial education materials available and are taking the time to do their research and invest and plan for the future, which is really heartening to see. I spoke to one who is putting away about a quarter of his pretax income into retirement and hoping to retire before the age of 50. And so you have this younger generation that has really narrowed in on retirement savings and setting up for their future. I think that was exciting to see.

Dana Taylor:

Daniel and Bailey, thank you so much for taking the time to talk to us.

Daniel de Visé:

Thank you.

Bailey Schulz:

Thank you.

Dana Taylor:

Thanks to our senior producers Shannon Rae Green and Kaely Monahan for their production assistance. Our executive producer is Laura Beatty. Let us know what you think of this episode by sending a note to [email protected]. Thanks for listening. I'm Dana Taylor. Taylor Wilson will be back tomorrow morning with another episode of The Excerpt.