Eighteen years separates younger boomers (those born in 1964) from older ones (those born in 1946). Older boomers say they plan on working past retirement age. Younger boomers say they want to retire by age 65. Neither says they’re saving enough.
A recent Metlife study, “Boomer Bookends: Insights into the Oldest and Youngest Boomers,” shows in the years leading up to retirement, a majority of both age groups admits their retirement savings plans are not on schedule; 46 percent of the oldest group and 57 percent of the youngest say they are not saving as much as they hoped.
“Our conclusion from this data is that the Oldest Boomers are behind in their savings and many are delaying both Social Security and retirement. The youngest group, twice the size of the oldest group, is also behind on saving, which has ramifications for the entire economy as we move through the next 20 years,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “Our current economic downturn has impacted the Oldest Boomers, who have fewer years to recover financially, and points to the need for the younger group to build a financial safety net as they look ahead to their retirement.
“In our comparison between the Oldest Boomers first contacted in late 2007 and re-contacted late last year, we found that there are many consistencies, but not when it comes to retirement,” Timmermann continued. “They continue to rate their health as good; they have remained in their own homes and they continue caring for their aging parents. However, only 15 percent of those who said in 2007 that they would retire in 2008, actually did.”
Unlike older boomers, according to the study, younger boomers will not rely on defined benefit pensions as much because they expect to depend largely on their 401(k)s. Although Social Security still plays an important role for both age cohorts.
Only 19 percent of the 2.7 million Americans born in 1946 have retired, and only 25 percent say they are on track to saving fully for retirement. What’s more about half of the older boomers remain in the workforce.