About 47 percent of early baby boomers are not expected to have enough money to cover basic living expenses
... a sobering study released Tuesday shows the fantasy isn't far off the mark. About 47 percent of early baby boomers, now 56 to 62 years old, are not expected to have enough money to cover basic living expenses like food, utilities and health care through retirement...
Members of Generation X, ranging from 36 to 45 years old, should be in better shape because they have more time to prepare. Nevertheless, 44.5 percent of them also are expected to run out of money, the study said.
Inadequate savings will be disastrous for individuals who want to live as comfortably in retirement as they lived their working years. Even those who have saved adequately could be affected: New taxes or limits on Social Security may be required to help an overburdened system cope with so many needy people.
Although middle- and lower-income people are most at risk of running out of money in retirement, even the highest-income people, baby boomers now making over $72,500, could be at risk if they have a disease or accident that requires them to enter a nursing home early in their retirement years, said VanDerhei, who led the study. Nursing home costs average $200 a day. VanDerhei estimates about 13 percent of the high-income group would exhaust their savings prematurely.
When Social Security was established in the 1930s, people lived on average to 61.7. Now, the U.S. Census estimates that a 65-year-old can expect to live to 78.3. About 40 percent of women live to 90.
Because people are living longer and fewer will have the guaranteed pensions that the previous generation enjoyed, personal savings — either through 401(k) plans, IRAs or other accounts — are crucial...