Skip to comments.Study: Many Boomers Lack Retirement Fund
Posted on 07/30/2007 7:31:07 PM PDT by traumer
Study Says Nearly One-Third of Older Baby Boomers Haven't Saved Enough for Retirement
NEW YORK (AP) -- Nearly one-third of baby boomers ages 51 to 61 are at risk of not having enough in savings to finance a comfortable retirement, according to a study being released Tuesday by the Center for Retirement Research at Boston College.
With its analysis, the center has joined the national debate over how much savings is enough -- and has done so on the side that says there's a shortfall.
"We just don't believe people are saving too much," Alicia H. Munnell, a professor of management sciences at Boston College and director of the retirement research center, told The Associated Press.
A recently published academic study looked at the retirement preparedness of Americans who were in their 50s in 1992 and concluded that at least 80 percent had more than enough assets for retirement. Other scientists have argued that Americans may be saving too much.
The new Boston College study evaluated the same 51-61 age group, but looked at their finances in 2004, and found 32 percent to be "at risk" for not being able to maintain their preretirement standing of living in retirement.
The difference between the results, the center said, has to do with changes in the financial environment. For one thing, Americans now must wait until they're older than 65 to collect full Social Security benefits; meanwhile, lower interest rates mean they'll probably collect less on annuities and other investments. And many of today's workers do not have pensions like the earlier generation but must rely on worker-funded 401(k) retirement accounts, the center said.
Munnell said Americans have two choices -- to save more or to work longer.
For older people, "working just two years more ... can make a substantial difference" to retirement preparedness, she said.
"Working longer has a powerful effect because it shortens the period over which you have to support yourself and ... lets you put off tapping your 401(k) and collect higher Social Security benefits," she said.
The study was done using the center's National Retirement Risk Index, developed with funding from Nationwide Financial, the long-term savings and retirement product division of the Nationwide Mutual Insurance Co.
Keith Millner, senior vice president and head of Nationwide Financial's in-retirement division, said "there is a retirement crisis" because people are living longer, health care costs are escalating and workers aren't saving enough.
"The No. 1 issue is inertia -- people aren't doing anything," he said. "They need to get educated, get engaged."
Young workers especially can benefit from saving more because of the impact of compounding, he said.
Center for Retirement Research: http://www.bc.edu/crr
Nationwide Financial: http://www.nationwidefinancial.com
Oh, working hard is bad? How about working smart and hard?.... are you a boomer?... I’m sorry.
It was the boomers who brought us a Republican congress, while their parents (the so-called greatest generation) brought us the welfare state and liberalized immigration laws.
It’s another boomer bashing thread. The bashing started in the third post.
Your saving habits are commendable. The best kind of mental discipline needed to save is not "No, you can't have an exotic vacation." Rather, "Why do you need one?"
I know I'm being preachy, but if people focus on what they can truly do without, it makes savings not only easier but more rewarding psychologically. Basically, buy what you need.
Me? I travel if I have to. If I want a new dress for the holidays, I'll buy it, without guilt. There's nothing wrong with occasionally shopping -- within a budget. But the rampant consumerism among younger people is frightening.
My folks first home is still there, and I'd bet if purchased today, the first 3 months of mortgage payments would equal what they paid for the home in 1951.
Remember LBJs Great Society, all his socialist programs? LBJ was born in the early 1900s.
LBJ was certainly no baby boomer. Fact is when LBJ was elected president, most boomers were about 10 years old.
And what about FDR, the guy who signed SS into law, among other socialist programs? FDR was no boomer. Wasn't he born in the late 1800s?
Agreed. And I don't feel the least bit guilty when I say that I want it all back, every cent that was extorted from my payroll and my husband's payroll all these years.
Actually, the root was earlier. The commies got into the gov't starting in the 1930's. Then they did a mass move with corrupting the youth in the 60's and 70's.
The boomers' parents corrupted their kids. They are mostly at fault for swallowing FDR and commie lies.
Actually, some of the boomers' got wise finally and started voting in people like Reagan and the '94 republicans.
Boomers are still learning the truth about their parents today.
But the $ave and $ave doesn’t work !
The inflation of food and gas prices... not to mention the currency exchange rate !
I expect to live a long time and I am delighted that there are youngsters like you spending your time working hard. When my first SS check shows up I'll toast to you with a glass DP.
Thanking you in advance, I remain....etc...
I have a theory about that. Remember when I said I wasn't happy with the social changes boomers brought. One of them was women working. I'm not a knee jerk, "jerk", but I thought long and hard about it. My wife did work some during our 36 year marriage, but decided to stay home when my daughter was born. We even ended up home schooling her. The problems I observed with surrounding families was usually because the children were brought up by Day Care. I found very quickly you can't pay someone to "love" your child, just like you can't pay someone to "love" your money for you. Most financial advisor's made money whether you did or not. Your children grow up believing that work and money are more important than they are, and then the trouble begins. Many divorces are a blatant example to the children that they can be "bought", but even in tact families end up telling their children they can't be with them or take them somewhere, or whatever, because mom's working or dad's out of town or working overtime. Then, to make up for it, the parents buy John or Jenny an IPOD or an XBOX 360 with all the bells and whistles, just to prove how important they are to the parents. They go through life wishing dad would have seen them making the touchdown or teaching them to bait a hook, but end up with a $3000 carbon fiber bike.
As they move on themselves, if they aren't living the high life, they turn to drugs, crime, and even suicide, because they can no longer afford what mom and dad gave them out of guilt.
Now people say I am just trying to "hold women down" or some such thing, but when both parents have to work, the fact is, you are most likely spending too much, and paying too many taxes. The government loves working women. Instead of one blue collar male making $60k a year, they get an extra $30k-$60k from the spouse. That puts them in a higher bracket. I showed my wife on paper that she would have to make $18 an hour to make up for the extra car, the day care, the extra taxes, new clothes, ect, that her $12 an hour job would require. We did just fine by her SAVING ME MONEY, and me as breadwinner. I wasn't that highly paid, but we did just fine. If your new car has to be a Hummer rather than a Toyota Corrola, it's pretty tough on 1 salary. I found that after 15-20 years of saving however, I was making thousands, not hundreds, but thousands per month in interest and capital gains. I was able to live pretty good and have a home life. It's always better to get your money to work for you than your wife. I just believe God made it work that way. Working women are a big cause, IMHO, for the confusion kids have today. I understand divorce, and disabled husbands, and many other reasons a woman must work. I'm just saying it's not ideal. I have seen divorces before BECAUSE the woman wanted to stay home with the kids and the man said she was a deadbeat. Most of the time when the man was finally sent to college by the wife, or he got his new Harley, or he was finally able to buy his business, the woman was discarded like a soiled napkin anyway.
Thanks for the ping.
Yeah, and that's because the "new welfare" is social security disability. Nothing's going to be left for the truely disabled, and nothing's going to be left for those who contributed a lifetime.
“What you are is a socialist idiot. You think everybodys got a big house nestegg? you can shove it where your nestegg dont shine !!!”
don’t get nasty, Obie! The solution is quite simple, don’t you see?
You dip into the capital portion of your trust-fund, and make up for it over time by purchasing the cheaper brand of golf-balls and drinking blended instead of single-malt scotch.
You can even keep your country club membership.
Throw in your medicaid tax and start from there.
Employer match is not part of your salary, if it were it would appear as gross wages on your W2. Only your share is taken from your money.
I don’t lack a retirement fund now. However, if this market meltdown continues...
Our popcorn fart economy has to float on something, and it ain’t people saving their money.
Very few are bragging anymore: only the Jane Fonda's who are, indeed, degenerate.
However, many are now talking about how they screwed up. It's largely the boomer generation who has worked extremely hard to give us a couple decades of a roaring economy to support all those who have been raking in social security...plus, as I said they voted in RR and George Bush. More than a slim minority are now doing the right thing.
The so-called "greatest generation" wasn't so great in my opinion. Tom Brokaw is wrong. They initiated, Medicare, Medicaid, Welfare, etc. I don't know that they had true "christian values"; I think they were only talking the talk, not walking it. Proof is...they didn't raise their kids right IMO.
My brother (love Southerners!):
I am a boomer and I am feeding my retirement account as much as I can. I live like a Spartan now in the hope that I will be able to bank all of my Social Security money and leave it for the next generation (my 3 children). But if I am unable to save every cent of that money, please try to remember that the government stole it from me for years and years and years like they are stealing it from you.
Which brings me to my next point. Boomers should be taking care of their parents and our children should take care of us. That’s the way it used to be in our country. There’s plenty of room in those McMansions for 3 generations. How much money will be wasted by splitting up families and generations?
The economy is floating on the chinese money....
The inflation of food and gas prices... not to mention the currency exchange rate !
Nobody ever saved their way to true prosperity. It's incorrect thinking. Avoid wasteful spending, sure, but you have to create value for others on the front end or you just won't get anywhere.
I was a young person during the 60's and I can tell you......MOST young people were NOT involved in the drug/anti-war/free love scene( although, which generation of men wouldn't want free love?...LOL)
a small elitist group of boomers somehow got a hold of our generational vision and it is bad, I agree....
but most of us are hard working,child raising, church going and parent appreciating type people....oh, and did I mention TAX-PAYING as well......
When someone is "self employed" this part of the SS contribution is called "the self employment tax".
It's part of your pay all right; if people had to pay it directly, both parts and it were not deducted at source the revolution would start tomorrow.