Late Boomers Face Retirement Challenges Amid Financial Strains
Beatlemania Boomers, those born between 1960-1965, seemingly face an uphill battle when it comes to retirement. They’ve had different saving habits compared to their predecessors due to factors like increased living costs, rising healthcare expenses, and a shift from defined benefit to defined contribution pension plans. Many also possess larger amounts of debt that have further hindered their ability to save for retirement.
The challenges these Boomers face, however, can be overcome with proper planning and financial awareness. Policymakers are also urged to consider these factors when crafting initiatives to support this group’s post-work life.
Research from the Center for Retirement Research at Boston College revealed that “late boomers” had approximately $280,000 in assets a decade ago, while older boomer cohorts had much more. Interestingly, in recent years, younger boomers, who are now 61-66 years old, have accumulated an average wealth of $400,000. However, wealth increment didn’t necessarily increase with age across all groups.
Financial stability took a hit for Beatlemania boomers during the 2007-2009 Great Recession. Factors like property devaluation and a crashing stock market during their peak earning years had a damaging effect. Consequently, they confronted shrinking 401(k) plans and dwindling home equity, which immensely impacted their life quality during retirement.
The rate of employment for these Boomers also took a nosedive, with only 61% of them still employed at 57 years old. Their average income reduced significantly, causing a considerable strain on their retirement savings. The decline in average 401(k) savings brought significant implications on their post-retirement lifestyle, especially with an increased life expectancy.
Stories of late boomers like Jeri Lynn, who lost her job and was later locked into a less rewarding role, seem to exemplify these struggles. There is a concern about the long-term consequences if these late boomers don’t address their retirement savings shortfall promptly. This situation underlines the necessity of financial education for the younger generation and the importance of early retirement planning.