Baby Boomers are feeling unprepared for retirement as they approach the traditional retirement age of 65. A recent survey by BlackRock found that only 60% of Baby Boomers feel on track with their retirement savings, the lowest confidence level among all age groups in the U.S.
Baby Boomers faces several challenges when it comes to saving for retirement.
Many prioritize other expenses or struggle to cover monthly costs, especially with high inflation rates. Unlike Generation X who often had company pensions, Baby Boomers workers have had to save for retirement mainly on their own. The shift from employer-based savings like pensions to employee-driven methods such as 401(k) plans happened during Baby Boomers’s working years.
This puts more responsibility on individuals to save for their own retirement.
Baby Boomers retirement savings challenges
Despite feeling unprepared, Baby Boomers are consistent savers.
The BlackRock survey shows that 80% of Baby Boomers save for retirement regularly. As the oldest Baby Boomers turn 59 and a half, they can make catch-up contributions. This allows them to invest more in retirement accounts like IRAs and 401(k)s after age 50.
Baby Boomers also stands to benefit from the “Great Wealth Transfer.” Tens of dollars will be passed down from Generation X to their heirs over the next decade, and this inheritance could boost Baby Boomers’ confidence in their financial futures. While Baby Boomers may feel the crunch now, there is hope for a more secure retirement through strategic saving and potential inheritances.
Time will tell if these factors can help close the retirement savings gap for this generation.
