FORTUNE – When the nation's financial system almost crashed back in 2008, it's easy to see why anyone approaching retirement would have panicked. They saw their lifelong savings plummet as home and stock prices spiraled. For 60-somethings, it seemed there wouldn't be enough time to make up all their losses.
As it turns out, today's retirees have it better than generations before them, according to a new report. Baby boomers lost big when the housing bubble went bust, but they also gained big during the dotcom and housing bubbles of the early to mid 2000s. And so oddly enough, this gave them a decent cushion to comfortably kiss their days working full-time goodbye.
These boomers, or those born between 1946 and 1955, may be the last group on track with enough retirement savings to last them through their golden years, according to a report released Thursday by Pew Charitable Trusts, a Washington D.C.-based public policy think tank.
They are retiring with a bigger nest egg than those born around the Great Depression between 1926 and 1935, as well as the generation born around World War II between 1936 and 1945, according to Pew. What's more, they are better off today than Gen-Xers or today's 40-somethings born between 1966 and 1975.
Pew's study looked at how the Great Recession affected the wealth and retirement plans of baby boomers, compared with Americans younger and older than them. It divided the baby-boom generation into two groups: early boomers, who were born between 1946 and 1955 and late boomers, who were born between 1956 and 1965. While early boomers may be retiring comfortably, late boomers will struggle.
Before the economic downturn in December 2007, early boomers had more savings than generations before them. By the time they approached retirement in their late fifties and sixties, their median wealth was just over $241,000. By contrast, war babies when they were at those ages had $170,604, and Depression babies had $162,222.
What's interesting is that boomers weren't always on track to retire with more savings. In their forties and fifties, war babies had higher median wealth, $156,521, than boomers with $131,761. The difference is that during the dotcom and housing expansions, boomers between their forties and sixties saw their assets grow by 83%. By contrast, war babies saw only 9% growth between the same ages a decade earlier.
While that's good news for today's retirees, the next generations face less certain futures.
Over the past two decades, Depression and war babies have been shedding debt while boomers and Gen-Xers have been accumulating it. Everyone lost money during the Great Recession, but Gen-X took the hardest hit. Boomers may have lost 28% of their median net worth, but Gen-Xers who had less time to build their savings lost nearly half, 45%, of their wealth or about $33,000.
True, this generation has a few more years to rebuild their savings, but they likely won't be able to replace their income as well as as boomers have. Going by the theory that people should have enough savings and wealth to replace at least 70% of their income in retirement, Gen-Exers are in a rough spot. Late boomers are on track to replace nearly 70% to 80% of their income in retirement. By contrast, Gen-Xers, at the median, are expected to replace only about half of their income in retirement.
As Pew notes, all this gives policymakers more reason to pay special attention to the obstacles that today's 40-somethings face as they head into retirement.
What's also worth noting is that if Gen-X faces so much uncertainty in their golden years, millennials born in the 1980s and 1990s may have it worse if the job market doesn't turn around soon. Many started their careers after the bust of the dotcom and housing bubbles and barely, if at all, benefitted from those good old days. Many also entered the early part of their working years during one of history's deepest recessions. True they have many more working years ahead of them, but studies have shown that spells of joblessness early on could have lasting negative impacts on future earnings and employment.
In recent years, ownership of homes and stocks, which have historically made up the bulk of American wealth, has steadily declined. If the trend continues years from now, it's worth watching how millennials will fare as they approach retirement, particularly as the future of social security becomes even less certain.
If it's fair to limit taxpayers' expense for retirement money being set aside by "the rich," it's vastly more fair to limit taxpayers' expense for Obama's own package.
FORTUNE -- It's a lot of fun to be able to make what you think are clear, simple points about the difference between what people in power propose for the likes of you and me, and what they get for themselves.
But every once MOREAllan Sloan, senior editor-at-large - May 10, 2013 5:00 AM ET
BlackRock's CEO says that the U.S. may need to make retirement savings mandatory.
FORTUNE -- BlackRock Inc. chief executive Larry Fink said during a speech Tuesday that longer life spans and underfunded retirement plans are the defining challenge of our age, and went so far as to recommend that the U.S. consider making retirement savings mandatory.
Fink acknowledged that retirement under-funding is not a new issue, but times have changed and the MOREKatie Benner - May 7, 2013 2:20 PM ET
No one says the President doesn't deserve his benefits. But it's hard to get past his plan to limit savers to half the value of what he'll walk away with.
FORTUNE -- President Obama's proposal to limit the value of 401(k)s, pensions, and other tax-favored retirement accounts to about $3.4 million certainly sounds reasonable. After all, at a time of big budget deficits, we shouldn't subsidize "the rich" with tax breaks, MOREAllan Sloan, senior editor-at-large - May 1, 2013 5:00 AM ET
Funds have underperformed at a time when they are drawing more and more money from middle class retirement accounts.Stephen Gandel, senior editor - Apr 19, 2013 11:51 AM ET
There's an upside to investing in property for the long haul. But beware the tax pitfalls.
By Janice Revell, contributor
FORTUNE -- With the housing market showing signs of stabilizing, investors are turning back to real estate. And an increasing number of affluent savers have been using their retirement accounts to purchase homes, rental apartments, and other properties. Done properly, such a strategy can generate good income with modest volatility. But MOREDec 18, 2012 5:00 AM ET
The nation's new president wants to roll the retirement age back to pre-Sarkozy days. Bon chance.
By Vivienne Walt, contributor
FORTUNE -- Though François Hollande has just unpacked his bags in the presidential palace since being voted into office, he might want to start planning for his life after. At 57, he is just shy of the retirement age he promised to implement. Generous public pensions have long been a French MOREJul 18, 2012 5:00 AM ET
Even the best plan can be drained dry by getting sick. Here's how to protect yourself with disability insurance.
By Janice Revell, contributor
FORTUNE – Let's say you're a diligent retirement planner, the type who maxes out his 401(k) and IRA. Odds are, however, that you devote little thought to protecting the value of your human capital -- that is, your ability to earn and save money. Ignore it at MOREJun 26, 2012 5:00 AM ET
Retirement plan providers have been overcharging investors for decades - creating a huge drag on returns. But new rules on fee disclosure should help drive down costs.
FORTUNE – If you're a typical 401(k) investor, perhaps you check your account now and then to see how your investments are doing. Or maybe you just let them ride. One thing is almost certain: You don't know how much you're paying in management MOREScott Cendrowski, writer-reporter - Jun 25, 2012 5:00 AM ET
It's an old trope: Tap the nation's wealthy to help the less fortunate in their autumn years. Too bad they're already tapped out.
FORTUNE -- It's almost time for one of Washington's rites of spring: the arrival of the new Social Security trustees' report. The report, which is usually issued in April, will show Social Security's finances deteriorating because of a higher-than-projected inflation adjustment for 2012. This is likely to touch MOREAllan Sloan, senior editor-at-large - Feb 29, 2012 5:00 AM ET
|McDonald's gives Charles Ramsey free food for a year|
|Where your donation dollars go|
|The 'chicken poop' credit and other bad tax breaks|
|Investors consider life after Fed stimulus|
|Obamacare premiums in California lower than predicted|