grew up in prosperous times and lived life to
but have baby boomers saved enough for retirement?
the eighteen years between 1946 and 1964, over
78 million babies were born in the United States.
World War II had been good for the American economy,
pulling it out of the Great Depression for good.
During the fabulous 50s, unprecedented
industrial growth provided steady employment and
rising incomes. The four-child family became the
ideal, along with a house in the suburbs, two
cars in the driveway, and that wonderful new invention,
the television, in the living room. One-income
families were the normand for the middle
class at least, one paycheck was enough to supply
families with an increasing number of luxuries
and new experiences.
While many boomers
have invested wisely for retirement, the majority
have just not saved enough. There have been incredible
social and economic changes since the 1950s, when
boomers grew up with an innocent confidence that
life could only get better. Unlike their fathers,
who were likely to stay with one company and draw
a sizable pension, many boomers have job-hoppedsometimes
out of boredom or a desire to find work that would
make them happy, and sometimes because of mergers,
layoffs, outsourcing, and early-retirement buyouts.
education, and healthcare costs have depleted
retirement nest eggs as boomers have found themselves
sandwiched between college expenses for their
children and care for their elderly parents. The
increased frequency of divorce has also left many
boomers with much less in their IRAs and 401Ks
than they thought they would have.
Then there are
those who have put aside nothing at all. Perhaps
they followed the advice in the popular 70s song
Cast Your Fate to the Wind. Or perhaps
they lived paycheck to paycheck and simply never
had anything to save.
Retirement: How Much Will You Need?
In 2008, the oldest
of those 78 million boomers will turn 62 and will
qualify for reduced-rate social security payments.
In the decades that follow, more and more will
qualify. As most people know, social security
replaces only about 40% of pre-retirement income.
Investment advisors suggest that retirees will
need 60-80% of their pre-retirement income in
order to maintain a comparable lifestyle. But
that assumes that their expenses will decreasethat
retirees will simply put themselves on austerity
budgets and make up the shortfall. Unfortunately,
even if they want to be more frugal, it wont
be easy. Supplemental Medicare policies and long-term
care insurance are new expenses retirees must
absorb, and property taxes, home and auto insurance,
energy costs, and food expenses will all continue
Worst That Could Happen...
Boomers biggest fear is that a healthcare
crisis will use up funds theyve set aside
for retirement. Medical advances allow people
to live much longer than in the past, but their
quality of life is often not the best, and spending
for prescriptions that prolong life is through
the ceiling. Boomers are worried about living
out their final years in an unpleasant but expensive
nursing home, or having to ask their children
for help. This fear is another factor that fuels
the desire to accumulate just a little bit more
money and take less from retirement nest eggs
so theyll be able to grow and the funds
will be available when work is no longer an option.
boomers find needed funds in retirement?
An Associated Press
survey reported that the majority of boomers hope
to retire from their current jobs at around age
63. However, 66 percent anticipate they will work
for pay after retiring. Twenty-seven percent will
continue to work out of financial necessity, 43
percent because they cant picture sitting
around doing nothing, and 19 percent so
that they will have money available for extras
they could not afford on their retirement income.
The majority of
boomers foresee neither full-time leisure nor
full-time retirement, but a combination of both.
With 30 years of retirement a real possibility,
they are looking for challenges, not rocking chairs.
Some plan to launch new careers or use their skills
as volunteers. Others say they will go back to
school, start their own businesses, or try to
turn a profit from a hobby.
Are You a Wealth Builderor
Stretched and Stressed?
In The New Retirement
Survey, Harris Interactive® and Age Wave
questioned a diverse population and identified
five different types of soon-to-be retiring boomers:
the "Empowered Trailblazers," the "Wealth-Builders,"
the "Leisure Lifers," the "Anxious
Idealists" and the "Stretched and Stressed."
- About 18% were Empowered
Trailblazers, people who look forward
to retirement because they see it as a progression
to another phase of life. About 90% in this
group plan to work some after retirement,
but they will also be busy with travel, volunteering,
taking or teaching classes, and generally
enjoying anything new that comes along.
- Wealth Builders
(20%) are looking for more financial security
for themselves and their families, and money
is the main reason 79% will continue to work
after official retirement.
- Anxious Idealists
(13%) worry that they do not have enough money
to retire, especially since they want to leave
an inheritance for their children and a legacy
to charitable organizations.
- Leisure Lifers
(13%) just want to relax. Theyre sick
of work, probably never liked their jobs,
and definitely dont want to work after
retirement. They had low income levels and
did not save enough, but they figure someone
will do something to help them if they
get into trouble.
- The Stretched and
Stressed (18%) are well aware that they
have not saved enough for retirement. They
will work because they have to, but they dont
look forward to it. This group is the least
have an 82% chance of identifying with a group
that feels it needs more money for retirement.
With the economy in constant fluctuation and costs
of necessities rising steadily, its no wonder
that most people fall into the I need more
money category. Peace of mind means knowing
not merely that you will somehow be able to survive,
but that youll have the funds to allow you
to enjoy the happy retirement envisioned by the
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