27% of Baby Boomers Have Nothing Saved for Retirement

According to a recent survey conducted by Credit Karma, an astounding 27% of Baby Boomers (that’s Americans ages 59 and up) don’t have any money saved for retirement. That means that millions of Boomers who dreamed of spending their Golden Years traveling, spoiling grandkids, and playing 18-holes at their leisure are, instead, pushing retirement back by 5, even 10 years.

How Much Should Boomers Have to Retire?

According to the Bureau of Labor Statistics, Baby Boomers spend, on average, around $49,000 per year. That means if a person retires at age 65 and lives to the age of 100, then they’ll need around $1,715,000 saved up. Unfortunately, the reality is that most Americans heading into what they hope is their retirement age are pretty far off from that number in their bank account.

Will Social Security Help?

The average Social Security check is around $2,000 per month. You can claim Social Security any time between the ages of 62 and 70, but each year you wait increases your benefits between 5 and 8 percent. To become eligible for retirement benefits through Social Security, you must have at least 10 years of work history. Benefits are based on your highest 35 years of earnings.

Retiring Baby Boomers are increasing the number of Social Security beneficiaries much faster than the number of workers who are replacing them at work. By 2030, all Baby Boomers will be age 65 or older. This will obviously have a huge impact on the Social Security trust and unless Congress acts, the money is estimated to enter insolvency by 2033. What does that mean? Well, it wouldn’t exactly be bankrupt, but it could mean over a 20% cut in benefits for all current and future beneficiaries. The reduction would, no doubt, hit hardest for those who have nothing saved for retirement.

At the moment, it seems that while all parties agree that reform must happen, there is much debate on the questions of “what,” “when,” and “how much?” So, will Social Security help your finances in retirement? The short, but rather uncertain, answer is: we’ll see.

Dave Goodsell, executive director at the Natixis Center for Investor Insight said, “With Social Security, you should hope for the best but prepare for the worst.”

What Can Baby Boomers Do to Prepare for Retirement?

To quote Goodsell once again, “What people need to do, the bottom line, is to take a minute to step back and say, ‘What do I need to retire, what will my income be,’ and then start saving.”

Of course, this is easier said than done, especially if you’re part of that 27% with nothing saved yet.

Nevertheless, here are a few quick tips to try if you have nothing saved:

• Tighten your budget by spending less on frivolities and getting thrifty with grocery shopping.
• Pay off debt. Especially debt with high interest.
• Utilize coupons, discounts, and rebates anywhere you can.
• Make extra money with these unique ideas.
• Listen to the Retirement for Real podcast for practical investment advice.
• Social Security Information and Resources For Seniors and Retirees

Need something else?

If you’re looking for thrifty tips, then check out these articles:

• 5 Thrifty Ways to Have a Cheap Vacation
• 9 Thrifty Gardening Hacks for Retirees Who Love to Play in the Dirt (that will save you HUNDREDS!)
• 10 Thrifty Tips for Entertaining Your Grandkids on a Budget