For millions of Baby Boomers and Gen Xers, the answer to the question “Can you afford to retire?” is increasingly uncertain. The traditional vision of retirement—clocking out at 65, collecting a pension, and enjoying your golden years—is disappearing. In its place: anxiety, gig work, and dwindling 401(k)s.
How Retirement Changed: From Lifetime Pensions to Lifetime Work
In previous generations, large employers offered guaranteed pensions. Today, only 15% of private-sector workers have access to a defined-benefit pension, down from over 60% in the early 1980s [BLS, 2024].
Instead, most workers now rely on 401(k) plans—self-directed, market-dependent, and riddled with risk. The shift means employees not only fund their retirements but also bear the consequences of poor market performance or bad investment choices.
The 401(k) Problem: Are You Saving Enough?
While 401(k)s were meant to supplement pensions, they’ve become the primary savings tool for most Americans. Yet according to a 2025 Vanguard report, the median 401(k) balance for those aged 55–64 is only $89,716 [Vanguard, 2025].
That’s barely enough to last a few years in retirement. Experts recommend saving 10–15 times your final salary to retire securely—yet most people fall far short.
Why So Many Are Falling Behind
- Low savings rates: Many Americans save only 4–7% of their income—far below the recommended 15%.
- Market volatility: Crashes like those in 2008 and 2020 wiped out retirement savings for many.
- Job-hopping: Frequent career changes often mean cashing out 401(k)s early (known as “leakage”).
- Rising costs: Healthcare, housing, and inflation continue to erode retirement security.
Even those who think they’re doing everything right—maxing contributions, diversifying investments—still face risks they can’t control.
Real Stories: Retirement Shock
The 2006 Frontline documentary highlighted retirees like Pat O’Neill, who returned to work after United Airlines slashed his pension by one-third. Today, this story resonates across America as older adults take on gig jobs, drive for Uber, or work part-time in retail to make ends meet.
As of 2025, 1 in 5 Americans over age 65 is still working, not because they want to, but because they must [Pew Research, 2024].
Is the System Broken?
Critics argue the 401(k) system is deeply flawed. Designed as a tax shelter for executives in the 1970s, it was never intended to be the backbone of retirement in America. Yet it became just that—replacing guaranteed pensions with risky, do-it-yourself savings plans.
Even well-intentioned reforms, such as auto-enrollment and target-date funds, haven’t closed the gap for low-income workers.
The Retirement Gap: Boomers vs. Gen X vs. Millennials
Baby Boomers with pensions may be the last generation to retire comfortably. Gen X is the first generation to rely almost entirely on 401(k)s, and many are nearing retirement with insufficient savings. Millennials face even greater challenges: student debt, housing inflation, and gig work without benefits.
What You Can Do Today
Even if you feel behind, you’re not powerless. Here are actionable steps to improve your retirement outlook:
- Increase your savings rate: Aim for 15–20% if you’re over 40.
- Delay retirement: Working just 3–5 more years can dramatically boost your nest egg.
- Downsize: Reduce housing costs and consider relocating to a more affordable area.
- Learn more: Use free tools like the AARP Retirement Calculator or NerdWallet’s Retirement Planner.
The Harsh Truth: For Many, Retirement Now Means More Work
One expert in the film said, “We’re shifting from lifetime pensions to lifetime work.” And in 2025, that’s exactly what’s happening. The definition of retirement is evolving—and for many, it means continuing to work, often well into their 70s.
Final Thoughts: Can You Afford to Retire?
The U.S. retirement system is under pressure. The future may not resemble the past, but with planning, education, and reform, there’s still time to build a more secure retirement for yourself and future generations.
Related Posts:
- Retirement Planning Checklist for 2025
- Best Countries to Retire In (2025 Edition)
- Tax Relief Coming to Social Security in 2025
If you’re unsure where to start, consider speaking to a fiduciary financial advisor.
