Nearly half of the baby boomers do not have enough retirement savings, and since wealth isn’t spread out evenly, younger generations will pick up the slack, which will reflect on their children.
Over one in four have no retirement savings
Census Bureau established that by 2030, the largest generation ever to reach retirement age will join 44 percent of boomers who surpassed 65. While many assume that the generation of boomers will be the last to enjoy a cushy retirement, the reality is different. Credit Karma’s survey revealed that 27% of people 59 or older have no retirement savings.
Crushing reality
Natixis company found that boomers believe they need $1.1 million to retire. The company’s study explained that boomers aged 59 to 77 would save $186,000 annually to achieve this goal. However, on average, people put $120,000 into savings, which is not disturbed equally.
Choosing between parents vs. children
Americans in their 40s, generation X or older millennials, got nicknamed the “sandwich generation” because around 50 percent of them have to help parents over 65 and have at least one child under 18. If the child is over 18, they are still helping them financially. The Pew Research Center survey, which came to this data, added that people in their 50s carry the same burden by around 36 percent, while those in their 30s 27 percent.
The appalling wealth distribution
The main reason people in their 40s have to support parents could be an astonishing wealth gap. According to Federal Reserve data, 56 million of those over 65 hold more than half of America’s money, or $96.4 trillion. They also make up 17 percent of the entire population.
Younger boomers are in deeper troubles
Younger boomers, who recently retired or have yet to reach 65, are financially more dependent on their families, which could translate into even more significant issues for their children. But that’s not the only issue. With the aging workforce, there are additional burdens on healthcare and the overall economy.
The rising cost of care
Even those who planned throughout their lives could be faced with predicaments. With increased demand, prices increased by around 20 percent in adult day cares, assisted living facilities, and nursing homes in the past decade. That number will continue growing with the rise of aging boomers who need all-day care.
Overbooked nursing homes
Despite the rise in expenses, nursing homes do not have capacities to take in all the aging retirees. Due to the pandemic, nearly 600 homes were closed, and there is a significant shortage of staffers. With that in mind, younger boomers will depend on millennial children and even Gen Z grandkids.
More money for older people
The government will have to secure more money for the growing aging population. That will create additional issues since many believe that current programs, like Social Security, Medicare, and Medicaid, are not enough to satisfy the needs of all retirees. It will also burden the economy further unless some proposed cuts are made, which would be a disaster for millions.
Working past 70
CBS Evening News reported that after speaking with some of them, many boomers accepted that their retirement would come when they turned 70. And some even expect to work part-time past the age of 70. Millennials still naively think they will be able to retire at 60.
Impossible choice
Those who cannot continue in the workforce will have to rely on their children. That will create impossible choices for families—caring for an aging parent or paying for your child’s education is just one example. The average monthly Social Security check for a retired worker is around $1,800, while an average household spends over $4,000. With price gouging, that number could be even greater.
Gender gap
There is also a small yet significant gender gap among boomers who are ready to retire. Fortune noted that 28% of retired women have nothing saved for their retirement compared with 20% of men. That is because half of mothers in the US cannot afford to save since they have to care for their children.
Aging mothers require help
The Financial Health Network data found that 32% of fathers reported a lack of savings, and another 39% were Americans without children. Laura Valle Gutierrez told Fortune that the retirement system does not count on the undervalued work of mothers specifically, adding, “Mothers are the ones who are paying a penalty for the status quo.”
