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Boomers Report No Savings at All

With fewer pensions and more debt, they face retirement challenges their parents didn't

by: Carole Fleck | from: AARP Bulletin | February 3, 2011

En español | The generation that gave rise to Hula-Hoops, Woodstock and Jimi Hendrix is reaching America's traditional retirement age this year woefully unprepared. As the oldest of the boomers turn 65, they face a retirement that is unlikely to go as smoothly as their parents' did.

The lingering pain from the most severe recession since World War II is partly to blame. Many boomers are on the verge of ending their work lives without fully recovering fortunes lost in the housing and stock markets.

That translates to less money to fund their retirement years, which could stretch for three decades given that boomers can expect to live into their 90s.

A poll released Wednesday found that a whopping 25 percent of people ages 46 to 64 say they have no retirement savings — and 26 percent have no personal savings.

The situation is almost as grim for adults 65 and older: 22 percent have no retirement savings and 14 percent have no personal savings, according to the poll of 2,151 adults conducted in November by Harris Interactive.

Similarly, a Pew Research survey in May reported that half of all boomers say their household's financial picture has worsened in the last year. A fifth say they have a lower standard of living than their parents had at their age.

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'Can I still retire?'

"The recession contributed to a general feeling of uncertainty," says Rob Hoxton, a certified financial planner and president of Hoxton Financial in Shepherdstown, W.V. "We have people who've come to us and said, 'Can you fix me and can I still retire?'

"People believe that they deserve to have a retirement and it ought to be somewhat similar to what their parents had," he says. "We constantly have to reconcile their expectations of what they believe they're entitled to with the reality that it's very expensive to retire and have 30 years of life after that, at least.

"There's a lot of dialogue," Hoxton adds, "and we come to a workable solution. But it may not be what they originally envisioned."

Indeed, for America's postwar generation, born between 1946 and 1964, life in retirement will surely bring more financial challenges than their parents faced.