Baby Boomers have had their impact on American and global societies from the time that they were legally able to vote. What started with violent sit-ins at some of America’s largest universities may now end with retirement. The sit-ins prompted the introduction of laws that changed race and gender relations permanently in America, and ultimately the world. Now, boomers may change the way America works and retires. It’s time to explore that statement in more detail.
Tail-End Baby Boomers Find That They Have to Keep Working
Baby boomers born between 1959 and 1965 are technically eligible to retire this year. However, even with social security benefits, a good chunk of them are in no financial shape to retire. A good portion of baby boomers born in during these years face the real risk of living in poverty if they were to stop working for good.
To be fair, their lack of financial preparedness is not entirely their fault. The Great Recession which began in 2008 changed the nature and structure of both the American and the global economies. Tail-end baby boomers were hit especially hard during this severe economic downturn and it affected their ability to save in general, especially for retirement.
Part of the reason for that was because many of these baby boomers became unemployed for many reasons. Unfortunately, a good portion of them were unable to find new jobs as the economy rebounded a few years later. Consequently, their ability to save more for retirement was severely hampered. What was worse was that some of them were forced to dip into their existing savings, including their retirement plans, to survive.
So, for the most part, their overall savings declined, sometimes dramatically and drastically in relation to older baby boomers.
There is Inequality Amongst Baby Boomers When it Comes to Retirement
Anglo-American boomers, college educated men, and college educated boomers in general are much better prepped financially for retirement than minorities, women, and older adults with high school diplomas or less. So, far too many younger baby boomers will find that they either can’t afford to fully retire, or that they can’t afford to retire at all.
Some research surveys have uncovered something startling and even scary about younger boomers’ financial position. Over 25% of younger baby boomers don’t have any retirement savings at all. Seeing as they only have at most a decade left before the start to retire, they may find that they are forced into later retirement, if they can even afford to retire at all.
It’s time to look at the stats more carefully. A little over half (53%) of younger baby boomers who will turn 65 between 2024 and 2030 have less than $250,000 in assets, according to a new study. The study analyzed data that the Federal Reserve and the University of Michigan Health and Retirement Study had compiled.
There is substantial gender inequality for younger baby boomers. While men have an average of $268,475 saved up for retirement, women have only $185,086 saved up. Things get even worse for boomers who never attended college. They have only $75,300 socked away for retirement. Highly educated boomers, those with at least a college degree, have about $591,158 saved up.
They may have no choice to rely on Social Security benefits for up to 90% of their retirement when they turn 70. Yet, the average Social Security payout only yields $23,000 annually, or about ⅖ of the average younger baby boomers’ living expenses. Whats even more horrifying is that the Social Security fund may be depleted in as little as 8 years from now, leading to substantial across-the-board cuts.
Boomers May Change the Very Nature of Retirement
Clearly, boomers, especially at the tail-end, will change the way America views work and retirement. The younger baby boomers may well push the official retirement age to 67 or a little older due to financial constraints.
