When Americans rang in the New Year last week, the oldest members of the Baby Boomer generation reached their own milestone by turning 65-years-old. That landmark is part of a rising trend in which 10,000 people will reach that age every day for the next 19 years, according to the Pew Research Center.
All Baby Boomers turn 65 in two decades, and by then they will represent 18 percent of the country. But for the now-aging generation, reports suggest that many of these soon-to-be seniors will face difficulties heading into retirement. Problems like soaring healthcare costs, marginal savings, and financial losses from the Great Recession have many preparing to work into their twilight years.
Baby Boomers, born between 1946 and 1964, is America’s largest generation. With 79-million members they represent 26 percent of the U.S. population. And they face a retirement problem that is just as big. For the generation that sought to change society, many are prolonging retirement due to economic insecurity.
Surveys from Baby Boomers show mixed opinions about their outlook. A Pew Research poll found that this cohort was the most dissatisfied out of all age groups with the direction of the country, posting an 80 percent dissatisfaction rate. In another Pew poll, 21 percent of Baby Boomers said they have a lower standard of living than their parents, and more than one-third said their children would be worse off in the future.
The AARP, a nonprofit social welfare organization for those 50 and over, paints a slightly more positive picture: 78 percent of those turning 65 say they are satisfied with their lives. But the same survey says that 7 in 10 expect to work past 65. In another question, 40 percent said they would work “until they drop.” That’s similar to Pew’s poll, which found that among those ages 50 to 61, six in ten are considering postponing retirement.
The prolonged work ethic comes partly because their pockets have been hit hard lately. Baby Boomers were reportedly the likeliest to have lost money on their investments since the Great Recession, according to Pew.
At the workplace, traditional safety nets for retirement have eroded. Pensions are no longer commonplace. Instead, 401(k)s have gained popularity but many Americans including Baby Boomers have incurred small returns or losses.
Many Boomers also saw their housing home values decline form the housing crisis, a source of income that many depended on for retirement. And the Associated Press reports that this age group has mortgages with particularly high debt.
With retirement plans shrinking and investments plummeting, it has been difficult for Boomers to save effectively. A July 2010 report by the Employee Benefit Research Institute found that almost half of those between 55 and 62 don’t have the resources to pay for basic retirement needs or uninsured medical expenses.
Jack VanDerhei, one of the authors of the study points to the magnitude of this problem:
As the private-sector retirement plan system evolves from a largely paternalistic one to a system in which workers must make their own decisions, policymakers need to understand what percentage of the population is likely to fail to achieve retirement security under current conditions.
The graying of the Baby Boomer generation will rise in the years to come. With many of them having to pinch pennies, the ramifications from a large sector of the population lacking the resources to support themselves are enormous. As the new legislators take office, it will important to see how they will shape public policy for this electorate.