Moments that matter: Savings and the silver tsunami

At the time, I was a mom with two kids under age four and moving to a new city for a new job in a new sector that was also a big step up for me. I took pride as a saver and had always saved more than 3% in the retirement plans at my previous jobs, but I was about to unknowingly reduce that through an auto-enrollment default savings rate. In that moment, the last thing on my mind was my retirement. But it was the first thing on his. My friend-as-financial-advisor showed up for me in a moment that mattered.

It turns out I was not alone. Most people see a slowdown in their retirement savings rate when they switch jobs—often precisely when they’re getting a raise. They stick with the default savings rate even if they’ve been saving more.¹ The dynamic is just one of the many frictions one can experience in their overall savings journey. In the United States, the average worker has eight to nine jobs over their career. An unconscious choice like this during those job changes could result in having nearly $300,000 less in retirement wealth.

For my family, now is another moment that matters. As my mom and dad age toward retirement, the clock is running out on their ability to save. Again, I’m not alone. Like many in the sandwich generation, I’m having some of the most honest conversations about money that I’ve ever had with them: “How much do you have saved? What are your expenses? Will it be enough?”

This year marks the beginning of the “silver tsunami”—a wave that my parents are part of. More people in the U.S. will turn 65 in 2025 than ever before.² On top of that, baby boomers have amassed $82 trillion in wealth—more than double that of the generation that came before them.³

Boomers are poised to spend a lot of that wealth in retirement, especially on health care and supportive living arrangements. Many are likely to fall short of the necessary funding, but some will have more than enough. And so it starts—the greatest wealth (or liability) transfer that this country has ever seen.

Those surplus assets or retirement savings deficits are likely to land, disproportionately, in the hands of women, first as widows and then as daughters and granddaughters. In a typical heterosexual married couple, the woman has a seven-in-10 chance of outliving her husband (given gender gaps in marriage age and longevity). Often, if she does so, she can expect to live another decade.⁴

This dynamic creates both incredible opportunity and risk. About 70% of widows change their financial advisors when their spouse dies.⁵ For me, as a professional in the investment services industry, this stunning statistic raises questions about not only whom we serve, but also how.

Women are incredible retirement investors. They outperform men with similar incomes in contributing to and staying the course on their investments in workplace retirement plans.⁶ But many see things differently.

When we asked clients whether they considered themselves an investor, most women said no, as did three in 10 men. Instead, most people identified as savers. This is great news—after all, consistent saving is the most powerful driver of reaching any financial goal.

But savings alone aren’t sufficient for retirement. Investing savings helps them grow, and financial wellness best practices such as paying down debt and setting aside money for emergencies should also come into play. Fortunately, investing success doesn’t have to depend on whether clients consider themselves investors, savers, or anything else; it’s about what we do. Everyone can make smart moves with their investments. Each aspect here offers an opportunity to create a moment that can matter for ourselves, our parents, or the next in line.

As baby boomers retire, it’s a great time to think about who’s next in line and to show up for them in those savings moments that matter most.