Baby Boomers are retiring in droves, with today about four in 10 (39%) members of the Boomer generation identifying themselves as fully retired.
But retirement looks much different for Baby Boomers than it did for their parents and grandparents. The Boomer generation is caught in the transition from institutional responsibility for retirement financial security to an increasing amount of individual responsibility. Pensions are largely a thing of the past, which means many baby boomers retiring are responsible for their own retirement preparedness and saving the majority of their retirement income.
Unfortunately, many face a Baby Boomer retirement crisis. Statistics show that many Baby Boomers can’t afford to retire and most Boomers have not done enough to adequately prepare for their retirement years.
In fact, 69% of Boomers say they don’t have or don’t know if they have the financial resources to comfortably make it to age 85, the average life expectancy of a 65-year-old Boomer today.
To further their retirement challenges, many Boomers are still paying off debt after retirement. Eight in 10 middle-income Boomers (81%) are currently carrying debt in retirement, while three in 10 (28%) of middle-income Boomers say that they devote more than 40% of their monthly income to debt.
So how are Baby Boomers facing these retirement challenges? Over 50% of Boomers are relying primarily on Social Security benefits as their primary source of retirement income. However, Social Security isn’t intended to bet the primary source of one’s retirement income, and benefit amounts may not be enough to sustain a desired retirement lifestyle. Furthermore, with the Social Security future outlook in question, it may not be advisable to rely solely on these benefits.
The Bankers Life Center for a Secure Retirement report, Paying for the New Retirement: Responsibilities and Challenges for Middle-Income Boomers, uses retirement preparedness statistics to provide a tale on retirement challenges for generations to follow. More education, more advice and guidance and ultimately more saving for retirement will be necessary for people to live comfortably in their retirement years.
Eight in 10 (80%) retired middle-income Boomers are relying on Social Security or an employer pension to be their primary source of retirement income, while one in 10 (12%) rely on personal investments, savings, or employment as their primary source of retirement income.
Many Boomers haven’t made retirement preparedness a priority. Other than contributing to a retirement account or savings, only six in 10 (61%) middle-income Boomers have taken steps to plan their retirement.
Many Baby Boomers can’t afford to retire, with seven in 10 (69%) Boomers saying they do not believe or do not know if they have enough money to live comfortably to age 85.
Many Boomers are paying off debt after retirement, with three in 10 (28%) middle-income Boomers saying that they devote more than 40% of their monthly income to debt.