Millennials are normally the ones stressing out over their lack of retirement savings, but a new survey suggests baby boomers may have an even bigger reason to worry.
The 2018 Retirement Confidence Survey by Greenwald & Associates found that only six in ten American workers feel confident in their ability to live comfortably in retirement. Baby boomers, it seems, are feeling a lot of pressure.
A new independent survey by Clever.com found that most baby boomers think they’ll be able to retire by age 68, but they may not fully understand their financial needs. Personal finance experts generally suggest socking away about eight times your annual salary by age 60. Based on an annual income of $57,000 a year that would be about $456,000.
But when asked to reveal how much they had actually saved for retirement the average was around $136,779, well short of the recommended amount.
Other financial problems
Unfortunately, the survey found that boomers face other financial problems as well. A large portion of those responding to the survey admitted they are having trouble creating an emergency savings account and even paying off debt, making it even harder to save for retirement.
This isn’t the first survey to raise an alarm over the lack of retirement savings for a generation now entering retirement age. A 2015 report from the General Accountability Office showed a disturbing number of Americans were approaching their retirement years with no savings and few, if any, assets.
The report, requested by Sen. Bernie Sanders (I-VT), found that 52 percent of U.S. households age 55 and older have no retirement savings, such as in a 401(k) plan or an IRA. Worse still, the agency found many older households without retirement savings have few other resources, such as a defined benefit pension, non-retirement savings or other assets.
Too reliant on Social Security
A 2017 study by Bankers Life Center for a Secure Retirement (CSR) found boomers were overly reliant on Social Security to get them through retirement. Thirty-eight percent said their monthly check from the government would likely be their primary source of retirement income.
That's up more than 25 percent from before the financial crisis of 2008, a year which seems to have changed the financial landscape on a number of fronts.
Before 2008, Boomers were younger and a lot more optimistic about retirement. Then, about 43 percent said they expected personal savings or earnings from a job to be their primary source of income during their golden years.
The Clever.com survey paints an increasingly bleak picture for aging boomers, showing that 31 percent have no emergency savings and 40 percent are still paying off credit card debt.