Most baby boomers heading toward retirement have little saved: study (2024)

FAQs

Most baby boomers heading toward retirement have little saved: study? ›

Baby boomers haven't saved enough money for retirement

In 2020, 3.2 million Baby Boomers - those born between 1946 and 1964 - went into retirement in the United States, more than in prior years. From 2012 to the third quarter of 2020, 28.6 million Baby Boomers have retired in the United States.

Baby Boomers have sparked a notable change in the Social Security program. While experts previously anticipated funds would run out to pay full benefits in 2034, the Social Security Administration updated this prediction and said funds would actually not become insolvent until 2035, a year later.

Various aspects of economic burden are associated with an aging population: social security payments will increase, medical care insurance costs will grow, the burden associated with uncovered medical expenses such as pharmaceuticals will become quite serious, and long-term care costs will grow.

Two-thirds of these Peak 65 baby boomers will face challenges maintaining their lifestyle in retirement, the Alliance for Lifetime Income said. More than half (52.5%) have assets of $250,000 or less, while 14.6% have assets of $500,000 or less, the Alliance for Lifetime Income said.

Nearly a quarter of baby boomer and late Gen X men are 'unretiring' or planning to because they can't afford to kick up their feet in the current climate. Gen Xers are close to retirement—but most don't feel they can afford it.

You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.

They grew up with strong economic growth. Not all are rich, but in aggregate they have amassed great wealth, owing to a combination of falling interest rates, declining housebuilding and strong earnings.

In contrast, the Boomers will get a bargain. When they entered the workforce in the late 1960s, they paid only 6.5 percent of their earnings to Social Security and nothing to Medicare. For about half of their working years, the Boomers paid 10 percent or less to Social Security and less than 1.25 percent to Medicare.

What is the #1 regret of retirees? ›

1. Not saving enough. One of retirees' biggest regrets is not setting enough money aside for their retirement. A recent survey showed that 59% of retirees say they regret not saving more, and 60% say they should have started saving earlier.

By 2040, the population of 80-plus-year-olds will have more than doubled from today, according to projections from the Census Bureau. In the years leading up to that, boomers will begin to leave their residences as they die, move into nursing homes, or shack up in granny flats.

Older homeowners who want to downsize have been scared into staying put by how expensive a smaller home would be in the current market. A homeowner who keeps all the profit of a home that sells for $500,000, for example, may find that a condo in their same area, where they can age in place, is $450,000.

The retirement of experienced Baby Boomers will create a talent gap and brain drain in the U.S. labor market, as their in-depth, 30-plus years of industry knowledge will go out the door with them. As senior professionals leave the workforce, it could lead to a shortage of workers.

The average life expectancy of baby boomers, Gen X, Millennials, and Gen Z are different. Compared to the 70-year life expectancy of baby boomers and the 85-year life expectancy of Gen X, Gen Z is predicted to have a life expectancy of over 100 years.

As baby boomers age, they must deal with the challenges of aging. That is why healthy living and regular check-ups with your doctor are more important as time goes by. Age is a risk factor for several chronic conditions, including diabetes, cancer, heart disease and Alzheimer's disease.

It's also helpful to look at the progression of boomers in the workforce. They started entering the ranks of ages 55 to 64 in 2001. That's when they accounted for about 10% of the employed. According to Advisor Perspectives, the percentage peaked in 2020 at just more than 17% and now stands at 16.5%.

Under the baseline, last-wave boomers are 6 percentage points less likely than first-wave boomers to have DB pension benefits (44 percent versus 50 percent), but are equally likely to have DC retirement accounts (77 percent versus 76 percent).

The boomers were born between 1946 and 1964, so their age ranges from 59 to 77. According to the Social Security actuarial tables, the life expectancy for those born in 1964 is 80. Those born in 1946 can expect to live to age 86. What is the average life expectancy of a baby boomer?

Full retirement age

Congress voted in 1983 to gradually raise the Social Security full retirement age (FRA) from 65 to 67. Four decades on, the change is nearly complete, with FRA reaching 66 and 8 months in the latter half of 2024.