AARP and Harvard University's Generations Policy Initiative Symposium Explores European and American Boomers' Situation
Boomers will accumulate greater wealth and generate more income than previous generations, but a report released this week by AARP suggests that they are no more likely to maintain their pre-retirement living standards in old age.
Read the report: How Will Boomers Fare at Retirement?
Another survey of boomers' expectations surrounding retirement—also issued today by AARP—suggests they know it. The survey finds that financial worries cloud boomers' rosy view of retirement.
Both the financial future for boomers in retirement, and their expectations, will be subject for discussion Friday in a symposium jointly hosted by AARP's Global Aging Program and Harvard University's Generations Policy Initiative. The experts will explore the attitudes of European and American boomers as they consider their impending retirements. AARP will release phase II of the Boomers Envision Retirement survey updating its 1998 version. Additionally, AARP will release a new report looking at the financial readiness of boomers, How Will Boomers Fare at Retirement?
The economic study How Will Boomers Fare at Retirement? was prepared for AARP by The Urban Institute. According to the study, boomers, those Americans born between 1946 and 1964, will amass more wealth in real terms at retirement than will the two previous generations.
Median household wealth at age 67 will grow from $448,000 among current retirees to $600,000 among boomers. Income at retirement is consistent with trends in wealth at retirement, the study shows. Projected household income at age 67 will increase from $44,000 among current retirees to $65,000 among boomers. As with wealth, there will be income disparities among older and younger boomers. Non-retirement income is expected to decline between older and younger boomers.
Whether the increased income and wealth at retirement will translate to better well-being in retirement is somewhat questionable, the study suggests. Although their real incomes will be higher than earlier generations, boomers will not achieve the higher economic replacement rates they will need compared to current retirees.
Replacement rates are the percentage of income during the working years that a person retains in retirement. Not only will boomers not achieve higher replacement rates, the study said, younger boomers will be less likely than current retirees to maintain their pre-retirement standard of living.
The economic research is supported by a new uncertainty in boomers' expectations and attitudes about retirement found in the phase II Boomers Envision Retirement survey. The uncertainty emerges in a survey conducted by RoperASW, which contrasts responses from the1998 survey.
The survey finds that less than one-third of boomers equate retirement with having enough money, a decline of 10 points from 1998. Slightly fewer than half see retirement as a time to indulge themselves, down seven points from 1998.