According to Pew Research Center on April 25, 2016, Baby Boomers are no longer America’s largest generation. The size of our generation peaked at 78.8 million in 1999.
At the beginning of the 21st century, there were about 74.9 million of us, aged 51 to 69, in the United States. This was equal to about 29 percent of the total population and translated into 10,000 Baby Boomers turning 65 every day from now until 2029.
What or who is a Baby Boomer?
Baby Boomers are those of all races, religions and ethnic groups who were born between 1946 and 1964. The term Boomer was given to our generation because of the “boom” in U.S. births at the end of World War II. The baby boom lasted nearly twenty years.
What’s in store for Baby Boomers when it’s time to retire?
Savings plans where we work are pretty common. However, nearly 20% of us have not been contributing to a 401(k). Many of us have not been putting away enough money to retire modestly. The average median savings of a Baby Boomer today is around $127,000. That’s not much of a nest egg. Experts recommend that retirees withdraw no more than 4% from retirement savings each year in retirement. If a retiree only has $127,000 in total savings, that means there would be less than $5,100 per year in retirement income!
If you happen to be a Baby Boomer who is thinking you can rely on Social Security income in retirement, think again. Social Security only replaces an average of about 40% of a person’s pre-retirement income. Retired Baby Boomers are only collecting, on average, $1,341 per month from Social Security.
Clearly, Baby Boomers face retirement challenges, but it is never too late to start actively planning for and achieving a comfortable lifestyle in retirement. For Boomers, and those generations that follow, you must start now to increase your savings for a big pay off later. If a 50 year old contributes an additional $6,000 in catch-up contributions per year to their 401(k) plan and continues to do this every year for the next 15 years, they could earn a hypothetical 6%, and boost their retirement savings by an additional $139,658. What are you waiting for?
What’s your plan, Baby Boomer?
What’s your retirement plan, Baby Boomer? Have you got one? Are you putting away enough money to retire modestly? If your nest egg is around $127,000, you must start now to increase your savings. Need help planning for retirement? We have several financial contact who can review your current plan, or set you up with one. Contact Presto Real Estate Services at (630) 336-1820 or write email@example.com. You can be confident you’ll retire comfortably.