NEW YORK (AP) -- A research report by the Pew Charitable Trusts says younger baby boomers and Generation Xers face an uncertain retirement because of reduced savings, high levels of debt, and losses during the Great Recession.
The study found that members of Generation X, who are now between 38 and 47 years old, lost almost half their wealth between 2007 and 2010. Young baby boomers, who are between 48 and 57, lost more money but a smaller portion of their overall wealth. The report says both of those groups are struggling to save enough money for retirement and are lagging older groups in terms of their savings. They also hold more debt than those groups did at similar points in their lives.
"Early boomers may be the last cohort on track to retire with enough savings and assets to maintain their financial security through their golden years," said the authors.
The report is based on the Survey of Consumer Finances, which is conducted every three years by the Federal Reserve, and the Panel Study of Income Dynamics, which has followed a group of families since 1968. It takes into account financial assets like savings accounts and retirement accounts, nonfinancial assets like business properties, and home equity minus debt.
Members of Generation X were born between 1966 and 1975. The report divides the baby-boom generation into two groups: early boomers, who were born between 1946 and 1955 and are now 58 to 67, and late boomers, who were born between 1956 and 1965. They were compared to people who were born between 1926 and 1935, around the time of the Great Depression, and people who were born from 1936 to 1945, closer to or during World War II.
According to the report, Gen Xers lost 45 percent of their wealth during the recession, as their median net worth dropped to about $42,000 in 2010, from $75,000 in 2007. Early baby boomers, lost 28 percent of their wealth, falling to about $173,000 from $241,000, and later boomers lost 25 percent of their wealth, to about $111,000 from $147,000.
Early boomers were approaching retirement in better financial shape than older groups because they benefited from the dot-com boom in the 1990s and the housing bubble of the last decade.
Based on the theory that people should have enough savings and wealth to replace at least 70 percent of their income in retirement, late baby boomers and Gen Xers appear to be falling short: late baby boomers are on track to replace about 60 percent of their income in retirement, and for Generation Xers, that figure falls to about 50 percent.
The report also found that baby boomers and Gen Xers have also been accumulating debt over the last two decades, and baby boomers are approaching retirement age with more debt than people who were born during the Great Depression or around World War II.
Of the five generational groups tracked, "Gen Xers are the least financially secure and the most likely to experience downward mobility in retirement," the report concluded.