Boomers may have learned mathematics in school, but as we age, some of us may be forgetting the basics. Here are several retirement statistics from Annuity.org you may find unsettling if not downright startling:
- 48% of workers believe they don't make enough money to adequately save for retirement
- 43% of workers guess how much they need to retire, rather than base it on current expenses
- 33% of women have no retirement strategy
- 22% of all Americans have less than $5,000 saved for retirement; 15% have no retirement savings at all
- Only 56% of workers were enrolled in a workplace retirement plan in 2021
- 73% of non-retirees are worried they won't receive any Social Security benefits by the time they retire.
These statistics suggest that some Boomers are financially unprepared for retirement. As we have progressed in life, other pressing financial needs (buying a home, paying for a child's higher education, supporting other family members, etc.) may have taken priority over funding our retirement. With so many Boomers reaching retirement age, however, we are being faced with a difficult challenge: Will we outlive our money?
It's a legitimate concern with life expectancy for most Boomers beyond the traditional 65-year old retirement age. Our parents may have been fortunate enough to work for companies, schools systems or governments that provided valuable retirement income via pensions, but pensions today are virtually non-existent. Company 401k and personal IRAs have replaced pensions as the only non-Social Security retirement income available to most people.
As a result, today the burden of saving for retirement has shifted entirely to individuals. We can legitimately assume that Social Security alone will not be adequate to fund a comfortable lifestyle during our golden years. This is one major reason that 55% of workers plan to work in retirement. Some Boomers are likely to work in one way or another well into their later years.
In a post on the Life After Work Zone blog, Brian Feutz cites additional key statistics from the Federal Reserve about assets, income and debt among retirement households. Feutz also shares some fundamental tips, including:
- Save aggressively and spend wisely
- Keep your debt to a minimum and keep paying it off
- Maximize your savings and income everywhere you can.
Inevitably, many Boomers will see their working income decline or disappear in later years. If they don't have adequate retirement savings, their future could be in jeopardy. They'll need to draw on those retirement savings, in combination with Social Security payments, to live comfortably. At the same time, they'll have to manage expenses to live within their means.
A financial adviser can certainly help us with investments, but ultimately, it's up to all of us to take personal responsibility for tracking income and expenses -- budgeting so that we don't outlive our assets. It basically comes down to making sure we're doing the math.