The number of baby boomers and Generation X who plan to work past age 70—or forever—is stunning

Almost half of baby boomers and more than one-third of Generation X expect to work past age 70 or do not plan to retire at all, highlighting the need for backup plans in case life’s unexpected events get in the way of such goals.

According to a study by nonprofit Transamerica Center for Retirement Studies in collaboration with the Transamerica Institute, 49% of baby boomers expect to, or already have, extended their working lives past 70 or do not plan to retire. Their reasons for doing so are most as likely to be their health (78%) or their finances (82%). 

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“Baby boomers are extending their working lives, which can help bridge savings shortfalls. However, it’s important for them to have backup plans because life’s unforeseen circumstances could derail their best intentions,” said Catherine Collinson, chief executive and president of Transamerica Institute and TCRS.

Collinson pointed out that most people retire sooner than they had planned, with the majority retiring before age 65 due to employment-related reasons, their health or the health of a loved one.

“That’s why it’s so important to have contingency plans,” Collinson said. 

Baby boomer workers (born 1946 to 1964), who were born at a time when pensions were the norm, faced a massive shift during their lifetime away from such retirement safety nets. That shift put the onus on the individual to save for retirement, rather than the employer.

“Retirement is a broader societal issue and the retirement landscape is evolving faster than people’s working careers,” Collinson said.

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Baby boomers have saved an estimated median of $162,000 in total household retirement accounts, but have only $15,000 in emergency savings. A total of 40% of baby boomer workers expect Social Security to be their primary source of retirement income, but still 83% are saving for retirement in an employer-sponsored 401(k) or similar plan outside the workplace, the study found. 

For Gen X (born 1965 to 1980), 38% expect to retire at age 70 or older or do not plan to retire at all, and 55% plan to work in retirement. 

“Most Generation X workers are saving for retirement, but many may fall short. The oldest Generation Xers are now in their late 50s and the youngest are in their early 40s, so there is no time like the present to build their savings and create long-term financial plans,” said Collinson.  

Transamerica found that retirement preparedness has improved with each generation in terms of savings. Baby boomers began saving at a median age of 35. Generation X workers began saving at the median age of 30, millennials at age 25 and Gen Z began at the unprecedented young age of 19, the study found.

For Gen X, they saved a median $87,000 in total household retirement accounts but only $5,000 in emergency savings. Only 22% of Gen X workers are “very” confident they will be able to fully retire with a comfortable lifestyle and just 28% “strongly agree” they are building a large enough retirement nest egg. A total of 78% are concerned Social Security will not be there for them when they are ready to retire. And like baby boomers, the bulk—81%—are saving for retirement in an employer-sponsored 401(k) or similar plan.

For millennials, those born 1981 to 1996, they entered the workforce around the Great Recession, which began in late 2007. They started their careers with higher levels of student debt than previous generations. Millennials have waited to buy homes, get married, and start families. 

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Still, three in four millennial workers (76%) are saving for retirement in a 401(k) or similar plan. Those participating in a 401(k) or similar plan contribute a median 15% of their annual pay. Millennial workers have saved a median $50,000 in total household retirement accounts but just $3,000 in emergency savings.

“Millennials have retirement on the brain and frequently discuss retirement with their family and friends—more so than baby boomers, who are in or close to retirement,” Collinson said.

More than half—52%—of millennials expect their primary source of retirement income to be self-funded savings and 73% are concerned Social Security will not be there for them when they are ready to retire. 

For Gen Z (those born 1997 to 2012), that cohort entered the workforce shortly before COVID-19 when unemployment rates were at historic lows, then surged at the onset of the pandemic, and have since returned to lows. Despite this tumultuous start to their careers, Gen Z will have even greater access to 401(k)s and workplace retirement plans than their predecessors, Collinson said.

The pandemic has been especially difficult for Gen Z workers: 52% experienced one or more negative impacts on their employment, ranging from layoffs and furloughs to reductions in hours and pay and 51% have trouble making ends meet. 

Yet, they have not given up on retirement. A total of 67% of Gen Z workers are saving through employer-sponsored 401(k)s or similar retirement plans and those participating contribute a median 20% of their annual pay. 

Gen Z workers have saved a median $33,000 in total household retirement accounts but only $2,000 in emergency savings.

“It’s excellent news that they are saving, but the question is are they saving enough?” Collinson said. “What’s the future going to look like 30, 40, 50 years from now? People are expected to be living longer lives. How do you fund that adequately?”

“Many workers across generations are at risk of not achieving a financially secure retirement. Given the disruption of the pandemic on workers’ employment, finances, health, and the increased strain on social safety nets, the retirement risks faced by workers are greater than ever before,” Collinson said.