Tags: Retirement | baby | boomers | save

CNBC: Many Boomers Not Sacrificing Enough for Retirement

Tuesday, 17 Apr 2012 10:57 AM

By Michael Kling

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If you are like most baby boomers, you probably won't have enough savings to retire. You might have to keep working into your 70s.

The recent financial crisis that eliminated much of people's savings and home equity is partly to blame. In addition, inheritances may not be that large, and traditional pensions are being phased out, say experts cited by CNBC. Plus, most baby boomers just haven't saved enough.

You'd think workers who lost savings during the financial crisis and recession would save more to make up for the loss, but that hasn't happened, write researchers at the Center for Retirement Research at Boston College in a recent report.

Editor's Note: Did Bernanke Rig Your Retirement? Shocking Video . . .

"This involves sacrifice today – spending less on current consumption – not sacrifice tomorrow, through lower retirement income or having to delay retirement. However, workers seem not to have embraced this response."

Following the crash of the housing and stock markets, just over half of U.S. households were in danger of being unable to maintain their preretirement living standard at age 65, the report states.

You can't completely blame the financial crisis.

“They weren’t prepared even before the crisis," Alicia Munnel, center director, told CNBC, saying that people are living longer and healthcare costs are rising while retirement benefits are shrinking.

In 1983, 62 percent of workers were covered only by traditional defined-benefit pension plans, according to the center, compared to 17 percent in 2007. Workers covered just by 401(k) plans increased to 63 percent from 12 percent during the period.

Almost half of baby boomers fear they will face poverty in retirement, according to a study by Financial Engines reported USA Today. Almost half of those surveyed said they distrust financial services and insurance firms, and over a third said they are unconfident about making financial decisions.

One woman interviewed by the financial adviser said she "might be forced to become a bag lady."

Editor's Note: Did Bernanke Rig Your Retirement? Shocking Video . . .





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