Posted by Mary Clare McGraw
As the first cohort of the baby boom generation this year hits 63—which is the average age of retirement in the U.S.—the big question is: Are they financially ready to retire? That question is only going to gain urgency in the next several years as more and more boomers jump into the pool of retired Americans. Unfortunately, statistics suggest that retirement isn't going to be nearly as comfortable as most boomers had hoped.
Declining wealth, brought about by lower stock prices and falling home values, has hurt older households substantially. Americans lost 18% of their net worth last year, and the decline has disproportionately hit households of those nearing retirement. But even before the asset bubble burst, Americans looked ill-prepared for retirement. A year later the situation is no better.
The Center for Retirement Research (CRR) at Boston College estimates that 43% of Americans are "at risk," meaning they would be unable to maintain their current standard of living in retirement. The good news: Most Americans seem to understand their situation. Only 19% of the population says they are prepared when they really aren't, according to a CRR survey. The bad news is that they don't seem to be doing much about it, whether through saving, paying off debt, or taking advantage of preretirement investment opportunities available to them.
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The question of whether or not people nearing their 60's are financially ready to retire is something I have come across a lot recently. Its a scary situation to be in as so many baby boomers all begin to near that age.
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ReplyDeleteThis article is very interesting, as I am curious to see what the first wave of baby boomers will do, rather it be work longer than expected or retire with less money and live a different lifestyle then they would like. I think the debate between working longer and retirement is something many people nearing retirement are currently dealing with, and if the market continues to fluctuate it will be interesting to see what decisions they will make.
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