Two-thirds of ‘Peak Age’ Boomers Face Retirement Risk
PlanAdviser, Alex Ortolani
Two-thirds of Baby Boomers turning 65 between 2024 and 2030 will not be financially prepared to maintain their pre-retirement lifestyles, especially when taking into account gender, race and degree of education, according to research released Thursday by the Alliance for Lifetime Income.
Due to the lack of financial preparedness, more than half of 30.4 million boomers in the “peak” age range will rely primarily on Social Security for income, according to the paper written by Robert Shapiro, the former undersecretary of commerce for economic affairs. The findings are based on 52.5% of this cohort having assets of $250,000 or less, meaning they will likely run through their savings well before they die, according to the researcher. Meanwhile, 14.6% have assets of $500,000 or less, which will still be a stretch due in part to people living longer.
“The median retirement assets with Social Security are not adequate to maintain the peak Boomers pre-retirement level of living or lifestyles,” Shapiro said during a presentation of the research at the National Press Club in Washington D.C. “The fact is that there are very large gaps, and in particular enormous gaps in retirement access based in part on race, but to a lesser degree gender, and most importantly with respect to education.”
The paper is part of a series of public campaigns addressing Peak 65 in the U.S. by the alliance, with the organization’s key proposal being for plan sponsors and workers to implement guaranteed income annuities to supplement Social Security. The organization is a non-profit 501(c)(6) formed in 2018 by 24 financial services firms, including insurers and asset managers such as American International Group Inc., Franklin Templeton, J.P. Morgan Chase & Co., Lincoln Financial Group, Prudential Financial Inc., and TIAA.