Many low- to middle-income baby boomers lack sufficient savings and will rely heavily on Social Security to fund their retirement, according to a new report from Vanguard, highlighting the urgent need to address the depletion of the Social Security trust funds.
Other findings are more positive, showing that baby boomers in general own significant housing wealth that could be tapped to make up for likely retirement income shortfalls.
Overall, the report finds, only about four in 10 Americans across generations are on track to maintain their lifestyle in retirement. Across all income levels, Gen Z and millennials are projected to be better prepared for retirement than baby boomers and Gen X, thanks to broader defined contribution plan access and stronger plan design.
Still, only about 47% of Gen Z and 42% of millennials are on track for retirement. Debt burdens — especially student loans — remain a significant challenge for many, and the financial strain of this debt burden poses a significant challenge for younger individuals trying to save for retirement.
The good news for younger generations is that they have time to commit more resources and invest to fund future retirements. Baby boomers, though, are either on the cusp of retirement or have already left the workforce. Some of the steps they can take to improve their retirement outlook include setting tighter budgets, continuing to work longer than planned and delaying Social Security claiming, according to the report.
See the slideshow for a review of key findings from the new Vanguard report, highlighting the challenges many baby boomers are likely to face as they navigate life after work.
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