The generation that is closest to retirement is still worried about what happened 10 years ago.
The 2007 financial crisis has 37 percent of all Baby Boomers earning around $30,000 to $100,000 and saying they will not have a satisfying retirement, says a study from the Center for a Secure Retirement. On top of that, 65 percent of them have not had any benefits from the recovery that has happened so far since 2007.
So why are these Boomers struggling? It’s because this generation is not preparing for its future properly, which is causing its members to work longer than they need to.
“We see this trend as an opportunity for individuals to enjoy both the financial and emotional benefits of staying employed, even part-time,” says Scott Goldberg, president of Bankers Life. “While the definition of retirement continues to evolve, prudent planning and goal setting can help boomers regain confidence for a satisfying retirement.”
False sense of security
For many Boomers, there is a false confidence in their ability to save for the future.
The American College of Financial Services found that only 20 percent of Americans with assets under $1 million were financially literate about their savings. That explains how 60 percent of Boomers think that they are ready for retirement, despite how little they’re doing to prepare.
In terms of future income, 11 percent of Americans 50-or older have a pension to fall back on, compared to 48 percent of those 65 and older. That combined with career troubles are causing retirees to lose out on $4.3 trillion worth of savings by 2021.
The sooner you start saving, the better. And waiting until your 50s is cutting it close. A lack of savings and no income will hurt retiring Americans, both in their own financial lives and those of their significant others.
No money to give
Baby Boomers also feel like they will be less financially independent. In terms of their future:
- Only 16 percent feel they will have some sort of savings
- 34 percent say they will retire debt-free
- 19 percent expect to pay off their mortgage
- 16 percent feel they will be able to leave an inheritance
Instead of coasting into late life as they predict, Boomers might have to face an entirely different reality come retirement…
Working to survive
So with no savings, a lack of a plan, and no pension, how will concerned Baby Boomers survive? By working until they kick the bucket.
Among all Boomers, 45 percent feel they will have to continue to work part-time, compared to 32 percent before 2007. Eleven percent feel they will never stop working compared to 7 percent pre-crisis.
Boomers are also changing their saving habits to try to fix their struggles, as 82 percent have made some sort of change to their saving plan. Twenty-eight percent are saving more from their paychecks and 17 are saving a larger percent, while 21 don’t save anymore and 24 save less of their paycheck.
So what can you do to avoid that fate? Look for a job that cares about employee retirement plans, find ways to cut down and save for retirement, and try to consolidate your debt.
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