Retirement? What’s that?
Though there is some disagreement as to the degree of this phenomenon, it appears that Baby Boomers are typically working longer than their forebears and retiring later in life.
TheStreet.com cited a Northwestern Mutual study that found our typical target retirement age is now 68. A Wall Street Journal examination of the trend in 2014 found that 25 percent of 70-year-old men were still in the workforce or looking for work, compared to 20 percent in 2000. The 20 percent of 70-year-old women still in the workforce in 2013 was nearly double that of 2000.
Why are Baby Boomers continuing to work? Do they just love it that much? Does the thought of being glued into a recliner scare them back into the office?
For most of them, it’s more a matter of needs than desires. Social Security incentivizes delaying retirement, and many Baby Boomers can’t afford to quit working anyway.
The Motley Fool recently cited a BlackRock survey that found the average retirement savings of a pre-retirement Baby Boomer 55 to 65 years old to be just over $136,000. According to the survey, this translates to less than $10,000 a year for the typical retiree, not including Social Security benefits.
That won’t get you many rounds at the golf course.
Why are the numbers so small? Everyone’s different and everyone has different reasons for failing to save, but as I noted in a recent piece on succession planning, the Great Recession turned many Boomers into the Great Procrastinators.
When financial times get tight, the money we would normally reserve for savings gets squeezed to meet day-to-day necessities of our households and businesses. And once you grow accustomed to putting less into savings, it’s difficult to ramp it back up.
They’re regretting it now. According to a report from the Insured Retirement Institute cited by Time, just 43 percent of Baby Boomers are satisfied with their nest eggs, down from 79 percent in 2012.
That same report found that 45 percent of Baby Boomers have no retirement savings at all.
Those Boomers with little or no savings may feel like it’s too late to start now. The Motley Fool points out, however, that many tax-advantaged retirement accounts have “catch-up” provisions that are designed to help.
An aggressive savings plan is needed, but every dollar you put away now will be a dollar – plus interest – that you won’t regret not saving in a few years.