The Retirement Funds Boomers Rely on Most — and Why Rising Generations Will Need a New Strategy

Laura Bogart

Thu, Jun 5, 2025, 6:16 AM 5 min read

Whether retirement is like a sunrise on a distant horizon or you can already feel its golden rays warming your golden years, one thing is clear: Your money needs to be ready. While there are universal pillars of smart saving, such as keeping savings in a high-yield savings account, investing consistently and maintaining an emergency fund, each generation approaches retirement saving a little differently.

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When GOBankingRates teamed up with New York Life to understand how people are feeling about their finances today, one insight stood out. In a survey of more than 1,000 Americans ages 18 and older, only 20.81% of respondents age 65 and older said they rely on a 401(k) for income. In contrast, 43.93% said they receive income from an employer pension.

If you’re thinking that Gen Z or Millennials might not have the same access to pensions, you’re right. The way people save for retirement is changing — and future retirees will need a more self-directed strategy.

In the survey, respondents of all age groups were asked about their sources of household income. Unsurprisingly, older respondents — those in the 65-and-older group — reported high reliance on Social Security (90.17%) and pensions (43.93%).

More surprising? A relatively small portion of Baby Boomers — just 20.81% — reported income from a 401(k). That figure is nearly on par with the catch-all category of “other savings.” But that may not be shocking to those familiar with how retirement planning has evolved.

As retirement writer Donna Fuscaldo noted in a piece for Kiplinger, “For many of the baby boomers’ working years, they had access to pensions and a strong job market. They didn’t have to worry about where their income in retirement would come from.”

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Fuscaldo pointed out that by the time Gen X entered the workforce in the ’80s and ’90s, many companies were shifting away from pensions and toward 401(k) plans. Essentially, the onus for saving for retirement began falling to the employee instead of the employer.

Boomers also came into, and out of, the workforce during a time when Social Security largely seemed secure, or at least, not something they had to worry about long-term, giving them one more reason to feel financially secure in retirement.

It’s only natural that younger generations — Millennials, Zoomers, and even Gen X — rely mostly on income from their current jobs. While they’re not withdrawing from their retirement accounts just yet, it’s worth noting that 12.78% of respondents aged 55-64 reported 401(k) income, just eight percentage points below the 65-and-older group.