retirement

Baby Boomer-or Old Loser?
Baby Boomer—or Old Loser?They grew up in prosperous times and lived life to the hilt...
but have baby boomers saved enough for retirement?In the eighteen years between 1946 and 1964, over 78 million babies were born in the United States. World War II had been good for the American economy, pulling it out of the Great Depression for good. During the “fabulous 50s,” unprecedented industrial growth provided steady employment and rising incomes. The four-child family became the ideal, along with a house in the suburbs, two cars in the driveway, and that wonderful new invention, the television, in the living room. One-income families were the norm—and for the middle class at least, one paycheck was enough to supply families with an increasing number of luxuries and new experiencesWhile many boomers have invested wisely for retirement, the majority have just not saved enough. There have been incredible social and economic changes since the 1950s, when boomers grew up with an innocent confidence that life could only get better. Unlike their fathers, who were likely to stay with one company and draw a sizable pension, many boomers have job-hopped—sometimes out of boredom or a desire to find work that would make them happy, and sometimes because of mergers, layoffs, outsourcing, and early-retirement buyouts.Skyrocketing housing, education, and healthcare costs have depleted retirement nest eggs as boomers have found themselves sandwiched between college expenses for their children and care for their elderly parents. The increased frequency of divorce has also left many boomers with much less in their IRAs and 401Ks than they thought they would have.Then there are those who have put aside nothing at all. Perhaps they followed the advice in the popular 70s song “Cast Your Fate to the Wind.” Or perhaps they lived paycheck to paycheck and simply never had anything to save.Financing Retirement: How Much Will You Need?In 2008, the oldest of those 78 million boomers will turn 62 and will qualify for reduced-rate social security payments. In the decades that follow, more and more will qualify. As most people know, social security replaces only about 40 of their pre-retirement income in order to maintain a comparable lifestyle. But that assumes that their expenses will decrease—that retirees will simply put themselves on austerity budgets and make up the shortfall. Unfortunately, even if they want to be more frugal, it won’t be easy. Supplemental Medicare policies and long-term care insurance are new expenses retirees must absorb, and property taxes, home and auto insurance, energy costs, and food expenses will all continue to rise.  The Worst That Could Happen...
Boomers’ biggest fear is that a healthcare crisis will use up funds they’ve set aside for retirement. Medical advances allow people to live much longer than in the past, but their quality of life is often not the best, and spending for prescriptions that prolong life is through the ceiling. Boomers are worried about living out their final years in an unpleasant but expensive nursing home, or having to ask their children for help. This fear is another factor that fuels the desire to accumulate just a little bit more money and take less from retirement nest eggs so they’ll be able to grow and the funds will be available when work is no longer an option.How will boomers find needed funds in retirement?An Associated Press survey reported that the majority