Baby Boomers and the Changing World of Retirement

Over the next decade, the most chronicled generation in the United States will gradually enter retirement. At that point, each wave of Baby Boomers will learn if their retirement plans, Social Security, and personal savings are sufficient to maintain their existing lifestyles and meet their future needs.

Baby Boomers, a name given to those born between 1946 and 1965, have been noted for their creation of the “computer age,” quest for physical fitness, and expectations for living long, full lives. Now, as Boomers pass into middle age, many are beginning to focus on retirement.

Many Boomers wonder if they can depend on receiving Social Security benefits during their retirement years. Indeed, some economists question the future “security” of the Social Security system. To add to this uncertainty, not all employed Boomers have employer-funded retirement plans. In today’s workplace, the responsibility for retirement saving has shifted from employer to employee. Consequently, personal savings may be more important than ever before.

Broadening Perspectives

What can Boomers do to determine if their savings and assets are sufficient to fund their retirement? Because no one really knows what the future holds, definitive answers remain elusive. However, Boomers may be able to gain more insight into their financial future by assessing the following key items:

  • Potential income sources (income-producing real estate, inheritances, etc.)
  • Projected retirement savings account balances
  • Projected cost of future health care
  • Projected annual rate of inflation
  • Projected amount of Social Security income
  • Percentage of present income required for retirement
  • Length of years retirement may last or life expectancy

Survey Says. . .

The 2014 Retirement Confidence Survey (RCS) conducted by the Employee Benefit Research Institute* finds that worker confidence in having enough money to live comfortably throughout retirement increased in 2014, after having been on a downward trend for several years. More specifically, 18 percent of workers now say they are very confident, up from 13 percent in 2013. Retiree confidence in having enough money for a comfortable retirement jumped in 2014 to 28%.

As is true of every generation facing retirement, Baby Boomers need a disciplined savings program. With a personalized financial plan and commitment to save more, boomers can work toward improving their financial outlook to make their retirement years golden.

* Source: Retirement Confidence Survey, Employee Benefit Research Institute, 2014.

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