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    Baby boomer retirements have taken a big jump in the past year

    Some retirees may not have enough money to make a successful transition

    The number of baby boomers who are deciding to retire is at a record pace, at 3.2 million more from 2019-2020 than in previous years. However, according to a Pew Research Center analysis of monthly labor force data, the makeup of those retirees is starting to change. 

    The recent increase is more pronounced among Hispanic and Asian American boomers -- up four and three points, respectively. On the geographic side of the equation, the increase is coming from those living in the Northeast U.S. -- up from 35 percent in February to 38 in September.

    Job loss may be a factor

    Pew researchers say job losses may be a dominant factor in this wave of retirements, probably at the hands of the COVID-19 recession. Since February 2020, the number of retired boomers has increased by nearly 1.1 million. 

    Pew couches that number by saying that some of this increase could reflect seasonal change in employment activity. But running the numbers from February to September period in 2019, the population of retired boomers increased by only about a fourth of what happened last year.

    Another interesting metric is that the share of retiring boomers differs by education attainment. The number of boomers who finished their education when they graduated from high school are up two points since February, and those who completed a four-year degree are up one point. For those who had some college education, but didn’t walk away with a diploma, there’s been no change at all. 

    Will boomers have enough money to retire?

    Baby boomers and retirement savings go hand in hand, and many of those new retirees face mounting challenges regarding their savings nest. Navigating that can of worms comes with things like supplemental Medicare insurance.

    Baby boomers have an average of $152,000 pegged for retirement, according to the 19th Annual Retirement Survey of Workers conducted by the TransAmerica Center for Retirement Studies. While that may seem like a decent number when it stands alone, it’s not nearly enough to last through most people’s retirement. Based on information from the Bureau of Labor Statistics, adults between ages 65 and 74 spend $48,885 per year on average, which means they would blow through that $152k in less than four years.

    Does this mean that boomers should be sounding the alarm? Not exactly, but the situation does beg a reassessment of how long a boomer’s savings can last. It also begs the question of what adjustments can be made to soften a boomer’s cash outlay.

    "Aside from solely relying on Social Security, looking to downsize your home, moving to a more affordable state, relying on public transportation, and having a robust budget that itemizes discretionary and non-discretionary items are all a good start,” Mark Hebner, president and founder of Index Fund Advisors, Inc., told Investopedia.

    “The most important thing is that retirees have the right mindset about their lifestyle in retirement. This is why it is important to start making lifestyle adjustments before you retire."

    The number of baby boomers who are deciding to retire is at a record pace, at 3.2 million more from 2019-2020 than in previous years. However, according to...
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    Two firms team up to help baby boomers downsize

    One of the objectives is to keep unwanted household items out of landfills

    Every day, baby boomers across America begin the process of downsizing, moving from a large home where they raised a family into smaller quarters that require less maintenance. Along the way, they discard lots of household items they accumulated over the years.

    The William C. Huff Companies, which operates moving and storage firms, is partnering with Renovation Angel to help boomers downsize while keeping millions of unwanted household items out of landfills.

    The two companies collaborated on the approach. Renovation Angel distributes unwanted household items to people who need and want them. William C. Huff Companies moves or stores the rest.

    Their solution, called Downsizing Help, assists couples when they downsize and helps families liquidate an estate when a parent or family member dies. The companies say there are three goals -- to make the process easy, reduce the waste that ends up in landfills, and secure tax breaks for people who are downsizing.

    Tax breaks

    The companies say that the responsible recycling of unwanted household items can benefit community organizations while producing a tax saving of $3700 per $10,000 of donated items per family. The value of the donated items can be deducted from federal income tax returns

    "As large estates are bought, many new homeowners choose to discard everything in the home and renovate the home to meet new styles and designs, often sending 'like new' cabinets and appliances to landfills,” said Jim Henderson, owner of William C. Huff Companies. 

    “Also, when homeowners downsize they often need to rid themselves of the contents of the entire home which are no longer needed or wanted because they are moving into retirement communities where their new homes come fully furnished," Henderson said.  

    Henderson says the donated items now end up in thrift stores instead of landfills and find a ready market. Consumers can purchase those unwanted items for a fraction of their value. And the emphasis on the environment doesn’t stop there.

    Emphasis on the environment

    “Providing logistics with low emission vehicles and storing items to be repurposed in a sustainable, solar-powered warehouse, hundreds of thousands of pounds of CO2 are cut from our environmental footprint each year,” Henderson said. “It's a win for everyone!"

    The two companies say the market for this service is potentially huge. The National Association of Realtors recently reported that an estimated 12 percent of people between the ages of 45 and 64 who purchased homes in 2017 were downsizing.

    The companies say that works out to about 80 million households, with the potential to redistribute over $20 trillion in household items over the next 20 years.

    Every day, baby boomers across America begin the process of downsizing, moving from a large home where they raised a family into smaller quarters that requ...
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    Study shows average senior has saved $200,000 for retirement

    But Vanguard researchers say many have saved much less

    Americans have been told they need to save for retirement for decades, but a new survey on the subject from Vanguard shows that not everyone has been listening.

    The survey-takers talked with people nearing retirement age about their saving and spending habits and about how much they had socked away in retirement accounts. For those who had 401(k) accounts, the average balance was a little less than $200,000.

    But the situation might be even worse. The median amount of savings for adults who are at least 65 is just $58,000. That means most people in the survey had saved considerably less than the average.

    Concerns remain the same

    The Vanguard researchers say retirement plans have improved since 2006, when Congress passed broader incentives to encourage retirement plan participation. They note that plan participation has, in fact, improved since then.

    “However, as we look to the future, the main concerns affecting retirement savings plans largely remain the same -- improving plan participation and contribution rates even further and continuing to enhance portfolio diversification, enabling more individuals to retire with sufficient assets,” the researchers wrote.

    The report traced the poor performance to three main factors -- income, age, and how long an individual had been at a particular job. It also found gender played a role.

    “Sixty percent of Vanguard participants are male, and men have average and median balances that are about 50 percent higher than those of women,” the report said. “Gender is often a proxy for other factors, such as income and job tenure.”

    Of participants taking part in the survey, men had an average of nearly $107,000 tucked away while women, on average, had $72,451. The researchers found women earned less than men and hadn’t been at their jobs as long as men.

    But when all things were equal -- with women earning the same and having the same job tenure -- they tended to save more than their male counterparts.

    Other studies

    Other studies have shown people nearing retirement have less-than-adequate savings. A 2015 study by the General Accountability Office (GAO) found that half of older Americans had no money saved for retirement. When asked why, many said they had no money left over after paying expenses.

    Perhaps because of that, a 2018 survey by Careerbuilder showed more than half of workers aged 60 years or older said they are postponing retirement plans. Worries about having enough money to last through retirement appeared to be the overriding reason.

    The survey showed 53 percent of age 60-plus workers are putting off retirement, with significantly more men making that decision than women. Four out of 10 workers said they don't think they can retire until at least age 70.

    Americans have been told they need to save for retirement for decades, but a new survey on the subject from Vanguard shows that not everyone has been liste...
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    Survey shows older workers are postponing retirement

    More than half aren't sure when they'll stop working

    More than half of workers 60 years old or older say they are postponing retirement plans, according to a new study by employment site CareerBuilder.

    Despite an improved economy and rising wages, a large percentage of seniors in the workplace appear to be worried they won't have enough money to stop working.

    The survey shows 53 percent of age 60-plus workers are putting off retirement, with significantly more men making that decision than women. Four out of 10 workers said they don't think they can retire until at least age 70.

    It's going to have an impact

    "Postponing retirement will make an impact across all of our country's workforce, along with retirement policy and financial and health care planning," said Rosemary Haefner, chief human resources officer at CareerBuilder. "With workers staying in their jobs longer, employers are adjusting hiring needs, but also reaping the benefits of the extra skills and mentoring abilities of mature employees."

    While employers appear to be benefiting from the trend, what about the workers themselves? Few appear to be putting off retirement because they enjoy their jobs. Rather, it's a matter of addressing the uncertainty retirement brings.

    Nearly a quarter of the workers in the survey admitted they don't know how much money they need in savings in order to stop getting a regular paycheck.

    When asked to make an estimate, 20 percent of workers said they think they can retire on $500,000 in savings. Thirty-one percent said they would need between $500,000 and $1 million.

    Challenges

    Getting to those amounts have proven to be problematic. Roughly one in four people in the survey who are at least 55 said they do not contribute to a 401(k) or IRA retirement plan. Younger workers have a better record on that score, according to CareerBuilder.

    As most Americans have longer and healthier lives, the concept of retirement has undergone changes. The financial crisis of 2008 has also had an impact, disrupting retirement savings plans for many just as they were entering what should have been their peak earning years.

    A decade of stagnant wages hasn't helped matters. A 2017 study from Country Financial found over half the workers it surveyed were not saving for retirement. The most common reason was the difficulty in paying current expenses, with nothing left over for savings.

    More than half of workers 60 years old or older say they are postponing retirement plans, according to a new study by employment site CareerBuilder.Des...
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    Is retirement an outdated concept?

    Surveys show increasing number of people aren't planning for it

    Here's yet another study underlining the problems facing retirees, and as a result, how retirement itself may be fundamentally changing.

    Changing as in, maybe we aren't going to retire anymore, or not until we are too weak and infirm to be productive.

    The study comes from Country Financial, which reports consumers are worried about being able to afford retirement. But despite that concern, it also finds over half the people in the survey said they aren't saving money for retirement.

    What that suggests is people really aren't that concerned, or they have so much trouble meeting day-to-day expenses they don't think they have any money to put away. Either way, the notion of 21st century retirement is probably changing.

    Constant leisure

    For some, retirement holds out the promise of constant leisure, or the freedom to do whatever they want, without having to earn a living. To do this, however, requires a pretty significant income stream. And other studies have clearly indicated that most people approaching retirement don't have the assets for that. So there is a wide swath of the population that isn't going to achieve this kind of retirement.

    The Country Financial survey suggests that more and more people now plan to keep working and not retire until the very end of their lifespan. Over half of those in the study -- 51% -- do not include retirement in their long-term financial goals.

    The Economic Policy Institute came up with similar findings; nearly half of families have no retirement savings.

    Finding people in the workforce at age 70 or more is no longer uncommon, and may in fact become more common. The Pew Research Center reports only about 13% of Americans 65 and older were still working in 2000. Last year, more than 18% were.

    Working retirement

    Some people, in fact, enjoy what they do and don't want to quit. Others might want to leave their current job but try something else, even if it is part-time.

    Financial advisors, of course, point out that someone transitioning to part-time employment in their later years had better have some financial resources to supplement their reduced income.

    "Many Americans are outliving their assets because they did not include retirement in their long-term financial goals," said Doyle Williams, an executive vice president at Country Financial. "We strongly encourage people to develop a long-term plan so they can eliminate the fear of never being able to retire. By taking some simple steps almost everyone can have a plan in place to secure their financial future."

    Because people are now routinely living well into their 80s and beyond, the notion of walking away from income-producing work at 65 may be a quaint notion. Still, even if you aren't saving for retirement, you should be saving for something. Chances are, you're going to need it.

    Here's yet another study underlining the problems facing retirees, and as a result, how retirement itself may be fundamentally changing.Changing as in,...
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