Baby Boomers born between 1946 and 1964 are heading into retirement in droves (approximately 10,000 a day). Along with the aging of this iconic cohort come lots of data concerning their lack of preparation for their later years, a calamity that is expected to come to a head in the next 10 years. Insufficient financial resources coupled with on-and-off employment paint a gloomy picture for many retirees.

The following is a summary of some studies that shed light on the Baby Boomer generation's economic situation.

Key Takeaways

  • Baby Boomers, the generation born between 1946 and 1964, are retiring at a rate of around 10,000 a day.
  • Many Baby Boomers do not have enough saved for their retirement due to a lack of preparation, on-and-off employment, and the stock market decline of 2008 and 2009.
  • A Boomer who owns their own home in an area with a lower cost of living can retire on a lot less than a rent-paying retiree or senior in a major metropolitan area.

Baby Boomer Retirement Research

In January 2019, GoBankingRates published research conducted across the United States using three Google Consumer Surveys. The surveys determined how much the average American has saved for retirement. Each survey targeted a specific age group—Millennials, Gen Xers, and Boomers.

The 2018 Retirement Confidence Survey by the Employee Benefit Research Institute and the independent research firm, Greenwald and Associates, found that 45% of workers report that the total value of their household’s savings and investments is less than $25,000. This is not enough to cover one year's expenses. Based on information from the Bureau of Labor Statistics, adults between ages 65 and 74 spend, on average, $48,885 a year.

It is important that retirees assess their situation and make the necessary lifestyle adjustments before they retire such as moving to an affordable location and downsizing.

However, the survey also found that the majority of Americans have more than $10,000 saved for retirement: close to 7% have saved between $10,000 to $49,999. Thirteen percent have saved between $50,000 and $99,999, while 12% have saved between $100,000 to $199,999. Ten percent have saved between $200,000 to $299,999, and 16% have over $300,000 in retirement savings.

Research by the Insured Retirement Institute (IRI) also suggests trouble for some retiring Boomers. According to the study, 45% of Baby Boomers have no retirement savings. Only 55% of Baby Boomers have some retirement savings and, of those, 28% have less than $100,000. Thus, approximately half of retirees are, or will be, living off of their Social Security benefits.


The Great Millennial Wealth Shift

Why Baby Boomers Lack Funds

A key reason Boomers lack funds is the stock market decline of 2008 to 2009. This event scared many older adults out of the markets causing them to miss the subsequent rebound. Panic selling, although understandable, decimated many retirement accounts.

The following seven years of low-interest rates drastically undermined the yields of bond funds that savers and retirees were urged to purchase. These yields, in turn, were invested in capital that earned virtually no interest. With wages plateauing, it was difficult for most workers to ramp up savings in their final earning years.

“This is the first generation to face saving for retirement on their own,” says Elyse Foster, CFP® and principal at Harbor Financial Group, Inc. “I believe, early on, there was a lack of information on the importance of saving early and often. The assumption seemed to be ‘you are on your own.’”

Is This a Crisis?

Whether or not this can be called a crisis depends on many factors including what type of assets Boomers are drawing from. Boomers who own their own homes in an area with a lower cost of living may be able to live on quite a bit less than a rent-paying retiree or senior in a major metropolitan area.


The percentage of Baby Boomers with no retirement savings, according to the Insured Retirement Institute.

According to the Social Security Administration, 90% of retirees today receive Social Security benefits in contrast with only 69% of retirees in 1962. The average Social Security benefit of $1,503 per month for 2020, according to the AARP, is substantially less than the average wage, which is approximately $3,668, according to the Bureau of Labor Statistics.

For many retirees, leaving work can mean a sometimes drastic lifestyle adjustment. Mark Hebner, President and Founder of Index Fund Advisors, Inc., explains it the following way:

Aside from solely relying on Social Security, looking to downsize your home, moving to a more affordable state, relying on public transportation, and having a robust budget that itemizes discretionary and non-discretionary items are all a good start. The most important thing is that retirees have the right mindset about their lifestyle in retirement. This is why it is important to start making lifestyle adjustments before you retire.

The Bottom Line

For those depending on Social Security benefits for their senior years, maintaining a comfortable lifestyle in retirement will likely be difficult. But whether Baby Boomers are in a retirement crisis depends on how you measure the situation, where seniors are living, and how their situation compares with their predecessors.