Baby Boomers: The Changing Face
of Retirement

By: Jody Smith

Baby boomers have always cut a wide swath, and left the younger generation feeling squashed by their massive presence. As boomers have now begun to hit retirement age, their numbers may have a squashing effect on boomers themselves.

This may be felt in the area of retirement, as their sheer girth puts unprecedented pressure on the Social Security system. Combined with the downturns in the economy in recent years, pension plans are shrinking or disappearing, retirement savings have been lost, and money invested in homes has been diminished by the disaster of the housing market.

These factors are just part of the picture, of course. Baby boomers have not been known for being great savers, and the average boomer has less than $100,000 in savings for retirement.

Additionally, retirement at age 65 for many has become an impossible dream. Even for boomers who have enjoyed a very comfortable lifestyle, the scenario of a working old age is becoming the reality.

This will have an ongoing impact for the younger work force who have been waiting for baby boomers to move over and make room for them, as past generations in the work force have done. But the boomers are probably not going to be moving out of the way any time soon.

Retirement specialist and economics professor at the New School of Social Research in New York, Teresa Ghilarducci predicted that this will be the first generation since the Great Depression to be in worse shape financially than their parents' generation, with seniors more and more facing poverty.

Research director of the Employee Benefit Research Institute (EBRI) Jack VanDerhei reported that more seniors will be living below the poverty line, as the baby boomers continue to hit retirement age from now until 2030.

Alicia Munnell, veteran economist heading the Center for Retirement Research at Boston College, cautioned that just 50 percent of the private sector workforce has retirement savings plans, and after events of the last few years, workers are not confident that they can count on these plans to get them by. Munnell added that savings can disappear quickly due to escalating health care costs.

A lower standard of living seems inevitable for the average baby boomer. This can paint quite a daunting picture, when coupled with the fact that aging is liable to be accompanied by greater health issues, which can mean having to choose between health care costs like medication and hospitalization, and other essentials.

With people living longer than in the past, smaller savings will need to stretch over more years. People who have lived their lives in the middle and even upper class are considering the possibility that they may end up in poverty, with health issues they can't afford to deal with.

 

 

Sources:

Retirement crisis closes in on U.S. baby boomers

http://business.financialpost.com/2011/11/03/retirement-crisis-closes-in-on-u-s-baby-boomers/

Baby Boomer Retirement Savings

http://www.babyboomerpopulation.com/?p=136

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