A recent report has shown that American consumers in the “Boomer” generation are currently struggling more to retire comfortably than those in their parent’s generation did on average. There are several causes to this situation, but one of the main causes has been identified as the housing crisis that took place around a decade ago in 2008.
This recent report on consumers from this generation and their current ability to retire was compiled by the Stanford Center on Longevity. Numerous pieces of information were taken into account to analyze the boomer generation and their financial health. Among the data that was used were home equity data and retirement savings figures. The report was entitled “Seeing Our Way to Financial Security in the Age of Increased Longevity.
Numerous finding from the report back up the idea that consumers in their late 50’s are not as financially healthy and prepared for retirement as previous generations have been. For one thing, they are financially weaker. They exhibit a general trend of not having as much home equity as retirees from the generations coming before them. It’s further worth noting that consumers from this generation tend to have less wealth overall to help them avoid a tougher retirement. The decrease is seen in home equity and accumulated wealth even when looking at figures from age groups only 10 years younger than those from the boomer generation who are currently in their late 50’s.
Not only does the boomer generation tend to have less savings than previous generations, but a significant portion of them actually have no savings at all. Statistics show that a full 30 percent of consumers in this age group did not have any retirement savings established whatsoever as of 2014.
Conclusion drawn regarding boomers and retirement
All the data accumulated in the report presents a situation where most American workers falling into the boomer generation will not be able to enjoy the same lifestyle they had while working if they retire at age 65.
It’s quite likely that many consumers in this age group will have to delay their retirement due to the financial issues shown in the report. Some of the possible solutions to the financial issues boomers are likely to face going into retirement include retiring later, having a lower standard of living while they’re retiring, deploying retirement savings frugally, or doing a combination of several of these things.
While many are clearly going to struggle with being able to retire and experience tougher retirement, some are well prepared for retirement. Figures show that slightly over a quarter of consumers aged between 55 and 65 have at least $200,000 saved up for the future. However, consumers over 65 tend to have better retirement savings with slightly over 31 percent having more than $200,000 saved up in their retirement accounts.
Some boomers might do ok during retirement despite the current situation if they are living in an area with a lower cost of living and if they own their homes outright by the time they retire. Of course, consumers can draw from their social security once they retire, and some may be drawing in enough social security to live off of or at least greatly add to their income during retirement.