Warning to boomers: more work ahead
NEW YORK — One in four of the nation’s baby boomers probably won’t have the financial resources to retire on time and likely will have to work at least two extra years, according to a study released Tuesday.
The Center for Retirement Research at Boston College asked some 400 employers to gauge the financial preparedness of workers 50 and older. Baby boomers were born between 1946 and 1964.
“Employers responded that half will not have the necessary resources” to retire on time, the center found. Of those, more than half will end up working at least two more years, the center said.
“Our employer survey indicates that a quarter of all boomers currently in their 50s will lack the resources needed to retire at the age similar workers have in the past and, in response, will want to stay on the job at least two years longer,” it said.
The issue is important because working longer is an important option for people who haven’t saved enough to retire. It remains unclear, however, if employers are going to want to keep aging boomers on their payrolls or hire others.
The center, which is headed by Alicia H. Munnell, a professor of management sciences at Boston College’s Carroll School of Management, noted that retirement preparedness is harder to gauge now because many workers don’t qualify for company pensions, which their parents may have gotten.
Workers saving on their own, mainly through company-sponsored 401(k) retirement plans, have median assets of just $60,000 in their 50s — far short of what most will need to fund a comfortable requirement.
Meanwhile, Social Security qualifications have been set so that the longer workers delay collecting benefits, the higher they will be.
“Shortfalls in retirement resources will be much greater for the baby boom generation, raising the need to remain employed,” the study said.
“Social Security and employer plans will also offer significant increases in retirement income for delayed retirement.”