A recent Harris Poll survey of baby boomers (ages 46-64) and “matures” (ages 65 and up) reveals that the problem of boomers being financially unprepared for retirement is getting worse. While it seems that boomers expect to have retirement lifestyles that equal or exceed those of their parents’ generation, the reality is that for lots of us it will be worse, a lot worse.
For the boomer population, 25% have no retirement savings and 26% have no personal savings. The corresponding numbers for “matures” are 22% and 14%.
What is going on people? Even in tough economic times, can’t working boomers pull in their belts and find some way to put even $100 away for retirement? That would allow them to at least answer “yes” to a survey like this, giving them a boost of confidence. How deflating it must be to have to say “no” when asked if you have saved anything for retirement.
I am probably being hypercritical. We know that many boomers have lost jobs and for lots of them, finding a new job at their age has bordered on the impossible. Those folks have burned through retirement savings out of dire necessity. I have been very fortunate to work in a specialized field where the demand for services has remained steady and the availability of service providers is limited by the particular skill-set required. I’m one of the lucky ones and I give thanks every day for that.
Another factor in play here is that our parents’ generation had greater access to traditional corporate pensions. Boomers expected somehow to achieve a similar retirement standard without accepting the reality that we had to save more than our parents did, to compensate for our lack of pension income.
But let’s be honest about another reality. We as a generation have overspent and over-borrowed. In recent years, we are having to dedicate too many resources to paying down debts that shouldn’t even be there at this stage in our lives.
What does this mean? According to some experts, the typical baby boomer will have a retirement standard of living that will be more like those who retired 30 years ago. Those who insist that they will not cut back and do without will end up working a lot longer than did their parents.
What I’m concerned about is that those of our generation who work longer to live better, many will leave this earth before they ever get to retire.
I don’t think that is worth the risk. There are many studies that show that retirees at all income levels are able to accept and adapt to their economic situation and, in so doing, reach a high level of retirement contentment.
It’s never too late to start saving. At the same time, it’s never too early to begin accepting and preparing for a new retirement reality that may not be like our parents.
Link to more discussion of the survey: Many Boomers Report No Savings