It is no wonder that more and more Boomers are staying in the workforce, maintaining either full-time or part-time positions or working for themselves. Many Boomers need to continue to work, because surveys indicate that Americans simply are not saving enough for retirement.
For example, a new AARP survey of 1,500 middle income workers ages 40 to 59 confirms that retirement savings take a back seat to other financial needs. According to AARP, "76 percent of respondents have accomplished significant financial goals such as buying a home, while more than 70 percent have paid off mortgages, student loans or credit card balances. Some 67 percent have saved for a family vacation.
"But just 48 percent say they’ve saved enough to live comfortably through retirement. Nearly 30 percent say they forgo essentially free money by failing to get the full employer match in company-sponsored retirement plans; nearly 25 percent aren’t using recommended savings tactics such as setting aside automatic paycheck deductions."
AARP believes the problem is so serious that the organization has launched an interactive coaching tool to help people squirrel away retirement savings.
Under-funded retirement is really no surprise. Consider how the very nature of work and retirement has changed during our lifetime. It is exceedingly rare for an employee to remain at a company for many years, and just as rare for a company nowadays to provide a pension plan. Some companies offer to match retirement contributions made by employees, but the employee still has to pay into the plan from wages earned. Ironically, some jobs many once considered poor career choices from a monetary perspective, such as teaching or mid-level government positions, could now be considered attractive because of their health insurance or pension benefits.
In addition, the cost of goods and services continues to rise even as workers' wages remain stagnant. The average American family often has two incomes, but that is hardly enough to cover more than the basics of life. What if that family wants to send a child to college? It is likely they would have to start saving for that college education when the child is a toddler. Add to this the reality of monthly rent or mortgage payments, credit card debt, and putting aside some money for an emergency, and it is pretty obvious that saving for retirement is not a priority.
The fact is, "retirement" is just not a possibility for millions of Americans. There are many conditions that need to change for most people to be able to consider retiring. Boomers are often credited with redefining retirement, but I suspect part of the reason we are redefining retirement is not just because we want to, but because we have to.