Baby boomers near 65 with retirements in jeopardy - Polidicks

[quote]CHICAGO – Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they're hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years. The boomers, who in their youth revolutionized everything from music to race relations, are set to redefine retirement. But a generation that made its mark in the tumultuous 1960s now faces a crisis as it hits its own mid-60s. "The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early," says Olivia Mitchell, director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania. There are several reasons to be concerned: • The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C. • Reliance on stocks in retirement plans is greater than ever; 42 percent of those workers now have 401(k)s. But the past decade has been a lost one for stocks, with the Standard & Poor's 500 index posting total returns of just 4 percent since the beginning of 2000. • Many retirees banked on their homes as their retirement fund. But the crash in housing prices has slashed almost a third of a typical home's value. Now 22 percent of homeowners, or nearly 11 million people, owe more on their mortgage than their home is worth. Many are boomers. Michael Vanatta, 61, of Vero Beach, Fla., is paying the price for being a boomer who enjoyed life without saving for the future. He put a daughter through college, but he also spent plenty of money on indulgences like dining out and the latest electronic gadgets. Vanatta was laid off last January from his $100,000-a-year job as a sales executive for a turf company. And with savings of just $5,000, he's on a budget for the first time. In April, he will start taking Social Security at age 62. "If I'd been smarter and planned and had the bucks, I'd wait until 70," says Vanatta, who is divorced and rents an apartment. "It's my fault. For years I was making plenty of money and spending plenty of money." Vanatta is in the majority. Some 51 percent of early boomer households, headed by those ages 55 to 64, face a retirement with lower living standards, according to a 2009 study by the Center for Retirement Research at Boston College. Too many boomers have ignored or underestimated the worsening outlook for their finances, says Jean Setzfand, director of financial security for AARP, the group that represents Americans over age 50. By far the greatest shortcoming has been a failure to save. The personal savings rate — the amount of disposable income unspent — averaged close to 10 percent in the 1970s and `80s. By late 2007, the rate had sunk to negative 1 percent. The recession has helped improve the savings rate — it's now back above 5 percent. Yet typical boomers are still woefully short on retirement savings. Even those in their 50s and 60s with a 401(k) for at least six years had an average balance of less than $150,000 at the end of 2009, according to the EBRI. Signs of coming trouble are visible on several other fronts, too: • Mortgage Debt. Nearly two in three people age 55 to 64 had a mortgage in 2007, with a median debt of $85,000. • Social Security. Nearly 3 out of 4 people file to claim Social Security benefits as soon as they're eligible at age 62. That locks them in at a much lower amount than they would get if they waited. The monthly checks are about 25 percent less if you retire at 62 instead of full retirement age, which is 66 for those born from 1943 to 1954. If you wait until 70, your check can be 75 to 80 percent more than at 62. So, a boomer who claimed a $1,200 monthly benefit in 2008 at age 62 could have received about $2,000 by holding off until 70. • Medical Costs. Health care expenses are soaring, and the availability of retiree benefits is declining. "People cannot fathom how much money will be needed to simply cover out-of-pocket medical care costs," says Mitchell of the University of Pennsylvania. A 55-year-old man with typical drug expenses needs to have about $187,000 just to cover future medical costs. That's if he wants to be 90 percent certain to have enough money to supplement Medicare coverage in retirement, the EBRI said. Because of greater longevity, a 65-year-old woman would need even more to cover her health insurance premiums and out-of-pocket health expenses: an estimated $213,000. • Employment. Boomers both need and want to work longer than previous generations. But unemployment is near 10 percent, and many have lost their jobs. The average unemployment period for those 55 and older was 45 weeks in November. That's 12 weeks longer than for younger job-seekers. It's also more than double the 20-week period this group faced at the beginning of the recession in December 2007. If financial neglect turns out to be many boomers' undoing, challenging circumstances are stymieing others. Linda Reaves of Silver Spring, Md., never had much opportunity to save as a single mother raising two sons and a daughter. After holding a variety of positions over the years — hotel office manager, research analyst for a mortgage company, hospital mental health counselor — she was still living paycheck to paycheck. Then she was laid off in 2007 at the age of 57. She entered a training program to learn new skills, but all she has found since is a string of temporary jobs. In her daily quest for clerical or administrative work, she competes against much younger applicants. Reaves, who turns 60 this month, plans to work until she's at least 70 and then wants to travel, even if she doesn't know where the money will come from. "I just keep going. I don't really worry about it," she says. Add this all up, and there's a "slow-burning" retirement crisis for boomers, says Anthony Webb, a research economist at the Center for Retirement Research. "If you have a crisis where the adverse consequences are immediately clear, then people understand that they have to do something," Webb says. "When the consequences will be felt 20 or 30 years in the future, the temptation is that we kick the can down the road." As a result, he believes many won't change their behavior. For less affluent boomers, it won't take that long to feel the pain of poor planning. Concerns about financial trouble will hang over many of those 65th birthday celebrations in 2011. Many seem to view their plight through rose-colored granny glasses. An AARP survey last month of boomers turning 65 next year found that they worry no more about money than they did at age 60 — before the recession or the collapse of home prices. But in an acknowledgement of reality, 40 percent said they plan to work "until I drop."[/quote] [url=http://news.yahoo.com/s/ap/20101228/ap_on_bi_ge/us_retirement_crisis]Source - yahoo news[/url] These next 19 years will define our federal budget. We can most likely expect 1 of 2 things. Possibly never seen retirement or bigger budget for social security and Medicare. I for one don't ever expect to see retirement because of the fact of baby boomer's.

I think you need to go back to English class. [editline]27th December 2010[/editline] Your sentence structure is atrocious.

Don't Americans have proper pension schemes? Or are corporations over there taking that off you too now?

cutthedefensebudgetcutthedefensebudget

Who retires at 70? It would be hell for me to work past 60... no one wants to work their entire life.

[QUOTE=CabooseRvB;27019322]cutthedefensebudgetcutthedefensebudget[/QUOTE] This. Fuck the defense, all we need is a proper missile defense system, a proper-sized military, but for fucks sake. CUT THE DEFENSE BUDGET OF 800$ BILLION A YEAR AND OVER. IT'S FUCKING OUR ECONOMY UP. I blame the baby boomers for the fact we won't have a fucking retirement pension.

Cut the defense budget, raise Medicare and Social Security ages to 68, bring taxes back up to Clinton-era levels.

They can't possibly cut the defence budget, otherwise all the other countries will call them sissies and laugh at them.

Whats a Baby Boomer ? [img]http://www.left4dead.be/wp-content/gallery/l4d/boomer.jpg[/img]

[QUOTE=Sobotnik;27020137]They can't possibly cut the defence budget, otherwise all the other countries will call them sissies and laugh at them.[/QUOTE] Every other country is already laughing at them for having shit medicare and social security.

[QUOTE=Itsjustguy;27020648]Whats a Baby Boomer ? [img_thumb]http://www.left4dead.be/wp-content/gallery/l4d/boomer.jpg[/img_thumb][/QUOTE] That wasn't witty nor funny and in case you really are dumb enough to not know; [url]http://en.wikipedia.org/wiki/Baby_boomer[/url]

[QUOTE=Pace.;27019330]Who retires at 70? It would be hell for me to work past 60... no one wants to work their entire life.[/QUOTE] People are stronger than you think and most don't want to make themselves feel useless and retire just like that.

[QUOTE=Pace.;27019330]Who retires at 70? It would be hell for me to work past 60... no one wants to work their entire life.[/QUOTE] I don't even want to work past tomorrow.

Both of my grandparents are in their early 80s and they both still work. However, my grandparents are a rare exeption to the retirement "rule." I guess what I am trying to say is that just because you are old does not mean you can't be a productive member of society. And before you ask my grandfather is a economic adviser for 3rd world contries (Indonesia, Sri Lanka, etc.) and my grandmother gives talks about women's rights.

[QUOTE=not_Morph53;27023700]I don't even want to work past tomorrow.[/QUOTE] Who does?

[QUOTE=WPlayer;27022198]That wasn't witty nor funny and in case you really are dumb enough to not know; [url]http://en.wikipedia.org/wiki/Baby_boomer[/url][/QUOTE] Don't be an ass, some people might not know.

My father retired. He sat at home for a single week, before he got a new job as an IT guy, and now helps elderly people understand computers. He's so awesome. :buddy::h:

[QUOTE=WPlayer;27022198]That wasn't witty nor funny and in case you really are dumb enough to not know; [URL]http://en.wikipedia.org/wiki/Baby_boomer[/URL][/QUOTE] Yeah because that was common knowledge.

[QUOTE=R3mix;27019884]This. Fuck the defense, all we need is a proper missile defense system, a proper-sized military, but for fucks sake. CUT THE DEFENSE BUDGET OF 800$ BILLION A YEAR AND OVER. IT'S FUCKING OUR ECONOMY UP. I blame the baby boomers for the fact we won't have a fucking retirement pension.[/QUOTE] The Baby Boomers took the wealth their parents broke their backs to create, and just tore into it like locusts without properly thinking it through, I really don't have any pity for them. [editline]28th December 2010[/editline] [QUOTE=nikomo;27021196]Every other country is already laughing at them for having shit medicare and social security.[/QUOTE] Social Security wasn't meant to last the Great Depression, instead it survived because people grew used to using it and became reliant upon it.

[QUOTE=Canuhearme?;27025653]The Baby Boomers took the wealth their parents broke their backs to create, and just tore into it like locusts without properly thinking it through, I really don't have any pity for them.[/QUOTE] Wow that's a gross generalization there.

Ok, so baby boomers won't have enough savings for retirement. How did this come to be? Dumb economic policies? [QUOTE=carcarcargo;27025586]Yeah because that was common knowledge.[/QUOTE] It is common knowledge. [QUOTE=R3mix;27019884]This. Fuck the defense, all we need is a proper missile defense system, a proper-sized military, but for fucks sake. CUT THE DEFENSE BUDGET OF 800$ BILLION A YEAR AND OVER. IT'S FUCKING OUR ECONOMY UP. I blame the baby boomers for the fact we won't have a fucking retirement pension.[/QUOTE] I think America needs to back down from the world stage. Quit being the "world police force." I thought it was pretty much agreed after WW II that countries should only be allowed to have a military large enough to defend itself and not attack other countries. That way, no one repeats Nazi Germany. And yet America has an over bloated military that fights a bunch of preemptive and illegal wars. So yeah, cut the defense budget and keep our troops home. Might improve our the rest of the world's perception of us.

[QUOTE=cqbcat;27029715] I think America needs to back down from the world stage. Quit being the "world police force." I thought it was pretty much agreed after WW II that countries should only be allowed to have a military large enough to defend itself and not attack other countries. That way, no one repeats Nazi Germany. And yet America has an over bloated military that fights a bunch of preemptive and illegal wars. So yeah, cut the defense budget and keep our troops home. Might improve our the rest of the world's perception of us.[/QUOTE] I don't think you understand effective foreign policy.

[QUOTE=Canuhearme?;27030256]I don't think you understand effective foreign policy.[/QUOTE] I don't think you understand how to balance the budget.

[QUOTE=Canuhearme?;27025653]The Baby Boomers took the wealth their parents broke their backs to create, and just tore into it like locusts without properly thinking it through, I really don't have any pity for them. [editline]28th December 2010[/editline] Social Security wasn't meant to last the Great Depression, instead it survived because people grew used to using it and became reliant upon it.[/QUOTE] doucheking

[QUOTE=cqbcat;27029715] It is common knowledge. [/QUOTE] The world doesn't entirely consist of America.

How high are the taxes in America?

Retire at age 60? FUCK THAT. I get mine at 38 or 43 because i'll be in the army. [editline]28th December 2010[/editline] [QUOTE=kaven;27033317]How high are the taxes in America?[/QUOTE] 30% ish last I checked. Which for those poor folks like me, it's WAY too much, we can't stand to have so much taken from our pay while the rich can, however all the rich assholes get all these tax cuts and shit they don't even fucking need.

[QUOTE=Capn'Underpants;27033850]Retire at age 60? FUCK THAT. I get mine at 38 or 43 because i'll be in the army. [editline]28th December 2010[/editline] 30% ish last I checked. Which for those poor folks like me, it's WAY too much, we can't stand to have so much taken from our pay while the rich can, however all the rich assholes get all these tax cuts and shit they don't even fucking need.[/QUOTE] 30% seems somewhat resonable. Unless you have a lot of bullshit extra taxes.

[QUOTE=Canuhearme?;27030256]I don't think you understand effective foreign policy.[/QUOTE] I never said I did.

[QUOTE=Capn'Underpants;27033850]Retire at age 60? FUCK THAT. I get mine at 38 or 43 because i'll be in the army. [editline]28th December 2010[/editline] 30% ish last I checked. Which for those poor folks like me, it's WAY too much, we can't stand to have so much taken from our pay while the rich can, however all the rich assholes get all these tax cuts and shit they don't even fucking need.[/QUOTE] would you enjoy paying 50+% of your income?