Beginning in 2011, more than 10,000 baby boomers are turning 65 every day in a cycle that will continue for the next 19 years. And with these staggering figures, many experts are calling this boomer “coming of age” a troubling pattern amid tough economic times as most mature Americans have not saved effectively for retirement and/or are still retiring too soon to catch up.
In fact, according to a new report by The Wall Street Journal, savings for the s-called “401(k) generation” is falling seriously short. “The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal. Even counting Social Security and any pensions or other savings, most 401(k) participants appear to have insufficient savings. Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse. This analysis uses estimates of 401(k) balances from the end of 2010 and of salaries from 2009. It assumes people need 85% of their working income after they retire in order to maintain their standard of living, a common yardstick.”
As a result, many boomers facing shortfalls in retirement savings are making the types of sacrifices they hadn’t planned for nor even dreamed of: forced to postpone the end of lengthy careers, move to cheaper housing or remain in areas where work is plentiful, belt-tighten on luxuries such as eating out, or even eating well, foregoing travel plans, and, most strikingly, making riskier investments in a last-ditch attempt to shore up their retirement shortfalls. And with not enough in most matures’ coffers to support a lengthy retirement, the question is not what average Americans will do when they eventually retire, but rather what type of work they’ll pick up instead of fully retiring. As such, many men and women with scant savings in traditional retirement accounts must now work well into their 70s just to stay current.
“Tax-deferred 401(k) retirement accounts came into wide use in the 1980s, making baby boomers trying to retire now among the first to rely heavily on them. The problems are widespread, especially among middle-income earners. About 60% of households nearing retirement age have 401(k)-type accounts, according to government data, and those represent the majority of most people's savings. The situation is less dire for those in a higher income bracket, who tend to save more outside their 401(k) accounts and who have more margin for error if their retirement returns fall below the recommended 85% figure.”
In light of these new financial requirements for a realistic retirement, if you are a boomer siphoning from your savings to subsidize a job loss, consumer debt, or medical costs, the time to consider other options is NOW. Understand that a personal bankruptcy can free up the money you need to avoid being left empty-handed in your all-important later years.
So, if you’re an older American who’s been affected by the economy, and are now considering new ways out from underneath ever-increasing debt, and get back on track, knowing a qualified bankruptcy attorney can also help you to conquer your creditors and face your financial fears, yielding the right kinds of support, information and insights—at a low cost. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Call toll free to +1-919-646-2654 TODAY.