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Baby Boomers came of age in the shadow of the “Greatest Generation” – those World War II veterans who came home to a booming economy where life-time employment and a retirement pension were the norm in corporate America.

But the rules changed for Baby Boomers, the post-war generation born between 1946 and 1964. Now ranging in age from the mid-50’s to the mid-70’s. The Baby Boomer generation has seen:

  • Pensions scaled back or eliminated by most companies
  • Higher education costs skyrocket for their children and grandchildren
  • Technological advances and changes that have made millions of jobs obsolete
Adding to the financial woes of the Baby Boomers were two stock market crashes after 2000 that wiped away trillions of dollars1 from their collective wealth.

Limited reserves for Baby Boomers retiring

As a result, many Baby Boomers are now ill-prepared for their retirement:
  • About 29% of households of individuals age 55 and over have no retirement savings and no pension plan, according to a recent Government Accountability Office (GAO) Retirement Security study.2
  • Among those who do have some retirement savings, the median amount is about $104,000 for households age 55-64 and $148,000 for households age 65-74, according to the GAO.3 That may be a good start, but it’s likely not enough to finance a comfortable retirement for the next 20 to 30 years.

Working longer

In 1935 when the Social Security Act became law, the average lifespan in America was 61.7 years.4 As a result, many working Americans didn’t live long enough to retire or require any retirement savings (or Social Security benefits).
 
But by 2016, life expectancy in the U.S. had climbed to 79 – and for those who were already 65, the average age of death was projected at about 84.5 In other words, if you retire at age 65, there’s a good chance you’ll live another 20 years – and possibly beyond.

With a longer life to pay for, Baby Boomers also need to increase their retirement savings to make it through the final decades. That’s why, for many Baby Boomers, working longer isn’t really a choice but a necessity.
 
A number of factors, including better health and longevity, have made it more feasible for people to work well into their 60s and 70s. A job market that has warmed up to the experience and work ethic of older Americans has also made it possible for a growing number of Baby Boomers to prolong their careers.

About 10,000 Americans turn 65 every day, according to the U.S. Census Bureau.6 As a result, the number of workers 65 and over has more than doubled over the past two decades. About 9 million Americans in that age group were employed either full or part time in 2016, according to the U.S. Department of Labor. In the 20-year period from 1994 to 2014, the number of workers 65 and over increased by 117%:

Percent increase in employment by age and sex

In all, about 19% of Americans 65 and over reported being employed full or part time in 2016, which is well above the roughly 13% in 2000, according to the Bureau of Labor Statistics.7   That trend is expected to continue with workers age 65 to 74 projected to grow by 56% by 2024, and workers 75 and older projected to grow by 86%.

The next step for Baby Boomers who hope to someday enjoy a comfortable retirement is to put together a sound investment strategy to cover the costs of their twilight years.

If you’re a Baby Boomer or getting closer to retirement, read Part 2 of the series, to determine what steps you could take to build a more secure retirement.

Continue reading: Part 2. Money and Baby Boomers: Now What? Forging Your Personal Path to Retirement

1  Wall Street Journal, “Total Global Losses from Financial Crisis: $15 Trillion,” Oct. 1, 2012.

2 U.S. Government Accountability Office, “Retirement Security: Most Households Approaching Retirement Have Low Savings, an Update,” March 2019,

3 U.S. Government Accountability Office, “Retirement Security: Most Households Approaching Retirement Have Low Savings, an Update,” May 2015,   

National Center for Health Statistics, National Vital Statistics Reports.

5 CDC/NCHS, National Vital Statistics System, Mortality, 2017

6 U.S. Census Bureau, “An aging population: the older population in the U.S.”

7 U.S. Department of Labor, Bureau of Labor Statistics, 2016

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