In case you missed it, we’re approaching “peak 65” which marks the ascension of the youngest baby boomers turning 65. Why is that a big deal? For one thing, it may set off a huge wave of retirements. Good, say younger workers. Get out of our way so we can take those jobs.
Not so fast. Don’t believe the hype. All baby boomers are not rich. In fact, most of these retirees coming up soon are financially unprepared to stop working. According to the latest analysis, these retiring boomers may risk living in poverty.
In the aggregate, boomers are rich, or at least the wealthiest slice of the generation. That is if they are White and have a college degree. Boomers who are women, people of color and who only have a high school education are lagging way behind and will soon realize that their resources are inadequate for retirement. How bad off are they? One in four workers nearing retirement have zero dollars in savings. And with little time to make up that shortfall, their situation only grows worse.
We are facing that all too familiar situation where the common misconception is that all baby boomers are filthy rich slugs who are sucking the economy dry while younger workers suffer. The reality plays out much differently. Peak boomers with only a high school degree have saved a median of $75,300 for retirement, compared with $591,158 for college graduates. Social Security is designed to replace only 40% of a person’s working income, while the average benefit is about $23,000 per year — far from enough to provide a comfortable retirement.
The only upside is that younger workers such as Gen X, millennial and even younger workers will finally get what they have been clamoring for – the vacated jobs of baby boomers. The hidden cost of this labor transfer may be higher social security taxes to support struggling boomers.
You can’t say you didn’t see this coming if you read this or followed the news. Boomer poverty is in our near future and it’s real.
Jay Harrison is a writer and creative consultant for DesignConcept. You can also visit his author page here. His newest mystery novel, Rio Puerco Demise is available on Amazon. His first mystery novel, Head Above Water, is also available on Amazon. But that’s not all. You can also purchase the Best of BoomSpeak on Amazon.
