MIDDLE INCOME BOOMERS PUT BRAKES ON RETIREMENT

[dancinmama]

Not as if this will come as a big surprise.

www.fa-mag.com/fa-news/7449-alarming-number-of-middle-income-boomers-put-brakes-on-retirement.html

[thyme4change]

Time for lay-offs. But how are we going to do it to make it look like we followed EEOC laws?

[phil5185]

MIDDLE INCOME BOOMERS PUT BRAKES ON RETIREMENT

The recession may now be the stated reason - but the brakes were being applied long before that. Boomers simply spent their income, the retirement funds were trivial. Ten, 15, 20 years ago we saw only a 35% participation in our 401k Plan (a Fortune 500 corporation). Interestingly, the group of retirees a few yrs older than Boomers participated heavily and retired with larger accounts. A societal shift in priorities?

[Sum Dum Gai]

According to the study, 71 percent worry about outliving their money once they retire, 68 percent have experienced a decline in the value of their retirement accounts within the past three years and more than half (55 percent) have saved less than $100,000. One-fifth (19 percent) have saved less than $10,000.

They can blame the economy all they want, but how in the sam hell were they ever expecting to retire on those amounts anyway? Even if their accounts were cut in half recently, which is doubtful since they should have seen some recovery since then, over half still would have had less than $200k saved, and one fifth would have had under $20k. I don't care how frugal you are, there ain't no way in hell you're stretching $20k out to cover retirement.

Maybe they only used people that were eligible for pensions in the study or something.

[sil]

Two out of three (68 percent) middle-income Americans age 47 to 65 have experienced a decline in the value of their retirement accounts since 2008; one-third (30 percent) of those have not seen any rebound in value as of March 2011.
***********************************************************************************

If you havent seen any rebound in value since 2008, you sold low. So not only did they fail to plan by not savinging enough (anything) they also planned to fail by locking in their losses.

Folks on this board are the exception. Seems to me the rule is that we are a nation of idiots who cannot be trusted to manage our own retirements

[Savoir Faire-Demogague in NJ]

If you havent seen any rebound in value since 2008, you sold low. So not only did they fail to plan by not savinging enough (anything) they also planned to fail by locking in their losses.

Folks on this board are the exception. Seems to me the rule is that we are a nation of idiots who cannot be trusted to manage our own retirements

Sheesh, the friggin equity markets are up nearly 100%.

[Gardening Grandma]

"Folks on this board are the exception. Seems to me the rule is that we are a nation of idiots who cannot be trusted to manage our own retirements"

Sadly, this seems to be true. If these folks had no SS, they'd be dumpster diving with walkers and canes...... This is why I can't support privatizing SS.

[Sum Dum Gai]

Sheesh, the friggin equity markets are up nearly 100%.

Gold and other commodities are up too. The only way to get the results mentioned in the article would be to have sold all equities at the bottom and held cash since... which is never a good long term investment.

[Savoir Faire-Demogague in NJ]

This is why I can't support privatizing SS.

I do not believe a privatized SS system would merely fork over one's contributions to the individual.

[jkapp]

And don't you just love how the babyboomers say not to mess with their SS pmts but its ok to screw over the younger generation because they have more time to save? They had just as much time to save for themselves and chose not to...so screw the babyboomers and if the younger generation's SS gets touched then so should theirs! Shared sacrifice ya babyboomer dinks!

[Deleted]

Social Security? When I get the annual notice from Social Security, I look at it, confirm my past year wage totals, then throw it in the paper shredder.

I don’t look forward to getting SS, I don’t count on getting SS.

Amazingly, even in the face of the overall debt and funding issues with future entitlement programs, a Philadelphia Inquirer article this past weekend noted that when it comes to Baby Boomers and where they expect $ to come from – the response on dependency on SS:

[glow=red,2,300]Extremely Important – 40%
Very Important – 24%[/glow]Somewhat Important – 21%
Not Too Important – 7%
Not at all Important – 6%
Refused to answer – 1%

[glow=red,2,300]Really? [/glow] If the Fed Gvt. doesn’t get their act together, SS will take a hit. If the Gvt does get its act together, it will have to take a huge swing at entitlements – so either way, bad move for boomers looking to the Gvt for retirement needs.

[stats45]

As long as you only generalize the findings to the age group and income levels studied, you could have a representative sample of that group in the US population with 500 people if proper sampling techniques were used. The findings cannot be used to draw conclusions about the US population at large though.

[stats45]

I really don't think that Social Security is going to change much. SS is the overwhelming source of income for a large portion of retirees. That isn't going to change anytime soon. Thankfully, it is considerably easier to make SS solvent than Medicare.

There are plenty of people who were extremely frivolous (too much investment in primary residence, new cars all the time, etc.), but I think there are other pressures as well. Many people just have large fixed expenses that put pressures on average middle-class families such as day care, health insurance, and school/college. More than a few couples I know are paying over $2k-$3k a month on just daycare, health insurance, and school, and I know a few who are paying about double that. Even if you bring home $100k a year, that is a huge chunk of income.

[Gardening Grandma]

May 20, 2011 15:43:08 GMT -5 @sroo4 said:

Ok... maybe I am out of whack with reality, but is $25-$75k really an average household income for people who are 47-65?

That seems really really low to me. I mean maybe it is? It seems to me that if you are making that annually your strong suit isn't finance related. I would like to see what the percentage breakdown income-wise is for all people in that age range.

That figure doesn't sound off to me. Neither DH nor I made 75K in any year that we worked.

[nutterbutter]

May 20, 2011 16:57:51 GMT -5 Gardening Grandma said:

May 20, 2011 15:43:08 GMT -5 @sroo4 said:

Ok... maybe I am out of whack with reality, but is $25-$75k really an average household income for people who are 47-65?

That seems really really low to me. I mean maybe it is? It seems to me that if you are making that annually your strong suit isn't finance related. I would like to see what the percentage breakdown income-wise is for all people in that age range.

That figure doesn't sound off to me. Neither DH nor I made 75K in any year that we worked.

It's sad thinking that your kids and grandkids will be paying into the system, but by the time they reach retirement there won't be anything there for them.

[debtheaven]

That figure doesn't sound off to me. Neither DH nor I made 75K in any year that we worked.

We don't / didn't either GG.

Being in France now, I am surprised that my generation (very early boomer) is considered good with money. Because in the US, the boomer generation is globally generally regarded as "wastrels". I'm sure being entitled to health care here makes a HUGE difference.

ETA: Believe me, we pay through the nose for that!

[jkapp]

May 20, 2011 17:01:47 GMT -5 @debtheaven said:

That figure doesn't sound off to me. Neither DH nor I made 75K in any year that we worked.

We didn't either GG.

Being in France now, I am surprised that my generation (very early boomer) is considered good with money. Because in the US, the boomer generation is globally generally regarded as "wastrels". I'm sure being entitled to health care here makes a HUGE difference.

That's one thing I never asked my parents about as a kid - how much were they earning in their working years? They are retired and seem comfortable, but my dad was always big on investing and planning for retirement so I don't know if they made a lot and just saved a lot of it or did they save a lot and sacrifice?

My parents never bought expensive stuff (it took a while for them to catch up to technology ). They never took luxurious vacations (a Vegas trip now and then). I had to pay for most of my college expenses (my parents helped some) but I think they were protective of their savings so didn't help me as much as other parents did for their children. Which was probably a good thing all around - taught me how to make it on my own and let them keep their retirement savings.

If I asked them about their past and current finances I'm not even sure they would feel comfortable telling me...and I would feel just as uncomfortable if they asked about mine. It's weird how people can be protective of that info even from family! ;D

[sil]

It's sad thinking that your kids and grandkids will be paying into the system, but by the time they reach retirement there won't be anything there for them.

**********************************************
The system was unfair from the start. One generation collected without paying in, therefore another generation must pay in without collecting.

Since there are fewer people in my generation, I figure the money will be means-tested by the time Gen X retires. Once Gen Y hits their prime earning years, it will be common knowledge that social security is truly a "SS Insurance" fund that only benefits those who are too poor or too stupid to save for themselves

[Sum Dum Gai]

Many people just have large fixed expenses that put pressures on average middle-class families such as day care, health insurance, and school/college.

The boomers do realize there's no law saying you have to pay for juniors college degree right? I'm sure junior will appreciate it and all, but if doing so means you'll be totally dependent on him the second you can't work anymore, maybe he'd rather take student loans.

[stats45]

I wish they did realize that. I think if college expenses shifted more toward the student it would put downward pressure on costs. Parents could then help with some supplemental expenses like maybe helping to buy a first car or things like that.

That said, I wouldn't be surprised if federal student loan limits just shot up to help kick in more money, keeping prices elevated.

[stats45]

If the income levels in the sample are evenly distributed around a mean of around $50k, the households in the sample would be less affluent than a national representative sample of households that age. It seems fair to assume this is a lower-middle class/middle-class sample.

[Sum Dum Gai]

The title is middle income boomers, of course the salaries aren't going to be large. I'm sure the retirement savings of the high income boomers look a bit different, so too would the pension amounts they're expecting. I imagine the middle income boomers outnumber the high income boomers by a pretty big margin though.