At a time when nearly 8,000 Baby Boomers are turning retirement age each day, it does not appear that most Baby Boomers (Born between 1946-1964) are ready to retire. Fidelity's research reports the following retirement savings statistics:
- Boomers have $35,000 in median total household personal retirement savings.
- Boomers typically save $2,750 annually for retirement.
- Boomers are on track to replace 59% of their pre-retirement income.
Boomers who save in a 401(k) have an average 401(k) account balance of $80,000. - 57% of Boomers expect to receive a pension (either own or spouse).
- 22% of Boomers will rely on the sale of their primary home for income in retirement (that was in 2006—these plans are no longer realistic in 2008).
- 69% of Boomers will rely on working at least part-time for income in retirement
- Of the 69% of Boomers expecting to work in retirement:
-- 68% will do so to cover basic expenses.
-- 52% will do so to receive employer health benefits.
-- 23% will do so because they want to stay busy
Based on these retirement savings statistics, the bottom line is this: boomers financial planning for retirement has been inadequate. It's clear that most will need to work during their 'retirement years', will need to annuitize their assets (consume their nest egg for income—see the annuity calculator) and live more conservatively (perhaps in lower costs areas or with more stringent lifestyles) than desired.
Why has this happened and is there a way out? Boomers simply like to spend on goods that make them happy today rather than for their elder years as this retirement savings statistic indicates:
Retirement Savings vs Purchases of New BMWs
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The commonly accepted figure is 77 million baby boomers in the 20 years between the mid-'40s and mid-'60s.
That's an average of fewer than 4 million per year, or about 1 percent of the US population.
It doesn't sound like the omigod, the sky-is-falling financial catastrophe everybody dreads. How many people retired in 2008? Is there a huge difference between that number and 4 million?
I think with what has happened in the past 6 months, there will be a higher percentage of baby boomers staying in their jobs if they can help it. I don't think it is a matter of just wanting a little extra money anymore.
David Stillwagons last blog post..unemployed and over fifty news, March 8
I am in the generation just after the baby boomers. Some in my generation are doing very well with retirement planing but the generation after mine seems like they are the worse so far. Yes some baby boomers spend and never save but the generation x seems to spend even more than they ever will make.
I guess i like the idea i will have more money every year not less and can do with out some toys ever year.
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Funny how boomers are first one who made so much money and never saved that much to retire. They lived in the moment and will not do well when they retire. Not all people lived this way but alot of people did and now they are worried.
Fidelity Investments came out with its 2008 retirement trends data , and the news isn’t as bad as it could have been. Sure, average retirement account balances fell a whopping 27% to $50,200 last year... Anyways investors have become alert in investing their money.
I would like to see how they are doing after the recession. I know more people are saving and paying down debt but i doubt they are putting much away to retire on. I thinbk they should be putting more money away now and pay debt down at same time.
Yeah I'm thinking the recession definitely played some havoc on retirement. It's almost scary to think of how many people are having to spend their retirement to make ends meet due to unforseen losses etc. That's not even taking into account their investments themselves plummeting in value.
That is an interesting statistic but it is not surprising. I wonder why that is? Why do baby boomers have saved less for their retirement. I wonder what they spent all the money they made on...
This is a frightening statistic but oh-so-true. I have Baby Boomers in my own family and I can certainly vouch that they are more interested in purchasing goods than they are with saving for retirement. It is difficult to watch considering our social security system is going to be depleted as well.
I think mostly boomers like many from the younger generation " a little bit later i will start to save money for retirement ". Many never did as it was never comfortable or simple not possible. They really need to be worry now. Personally i am completely agree with author " boomers financial planning for retirement has been inadequate ". We all should learn from and put monthly some amount to our saving accounts.
Boomers savings may be inadequte now but based on current taxes and future taxes the current non boomer population will have to pay due to the debts the country has run up future generations will have a lot less when they retire
Save, save, and then save some more. Get your 401k or TSP (for the government or military folks in the US) and get the biggest bang for your buck that you can. Invest the maximum. If you are over 50, put in the additional that TSP allows. If the market dips, remember you are just buying more at a cheaper price (dollar cost averaging).
Then take all of those savings and relocate to Thailand like I did. Cost of living is much cheaper and you won't have to put up with Obamanomics.
That is why you need multiple streams of retirement income - government pension, army reserve pension, and social security to go along with the savings. Then, move to Thailand.