The Baby Boomers Retirement Blog

The other day I had a discussion about my Pension Report (download it if you don’t have it yet) with two young men of my son’s age: early thirties. They were trying to convince me that the report together with upcoming Pension Manual might be useless, since the Baby Boomers — you, the Boomers, as they put it — are the biggest spenders of all times and the highest earners as well. While all that is true, I know for sure that the other half of the equation is also true. Namely, that we, the Baby Boomers are not prepared for our retirement. Read this random quotations from very respectable studies and reports, and you be the judge:

The comprehensive study of nearly 2,000 Americans born between 1946 and 1964, shows boomers are optimistic about the future, but many are not adequately prepared for retirement.

As a group, boomers are in their peak earning years and continue to wield great influence in the U.S. economy, but they are not homogeneous — there are significant variances in needs, behavior, attitudes and resources. On one hand is an almost insatiable desire for real estate, with some owning multiple properties, and on the other, many have not adequately planned for retirement.

Are boomers ready for retirement? Many of them have little in savings and are fearful that they will outlive their money.

Many Baby Boomers are apparently planning to play catch-up with their retirement savings later in life instead of making regular deposits now, putting their retirement plans at risk, according to “Beyond Behavior: Why Boomers Underfund Retirement,” a new survey.

A number of recent studies have shown that many Boomers have great expectations for their imminent retirements, but have not set aside money to pay for it. Very few studies, however, have tapped into the field of behavioral finance to understand why Boomers find themselves in this predicament.

“We found that Baby Boomers are in a state of financial paralysis. They don’t know how much to save and they don’t understand some basic financial principles such as compound interest and adequate returns, so they are doing nothing,” said Dr. Frank Murtha, a behavioral finance expert and business professor at New York University and managing member of Frank Murtha Associates LLC.

Baby boomers are responsible for half of all discretionary spending in the country today and have annual discretionary income of $750 billion, yet too many are unprepared financially for retirement.

Only one in four of the boomers has invested assets of more than $100,000, one in three has less than $50,000 and by the time they reach retirement age, only one out of every two will have accumulated enough money to be able to support their current standard of living.

Nearly one out of two boomers believe they will outlive their money although that is a common fear among seniors. Nevertheless, “there are interesting adjustments to be made.”

Your thoughts?

About the author

Istvan Horvath is an author, blogger, former journalist, a passionate advocate of the Baby Boomers, and the founder of DigitalPensionCom. He is writing extensively about the Baby Boomers' retirement and pension issues. His Pension Report is an eye-opener. Visit his Baby Boomer Pension Blog for more articles. This article can be reprinted or republished provided the content and links are left intact, and the "about the author" section is included.