Most financial planners recommend that workers have enough cash saved to replace 70 percent to 80 percent of their income in retirement, but today’s Baby Boomers are falling far, far short of that goal.
Only 55 percent of Boomers have retirement savings at all, and of those more than 40 percent have less than $100,000 saved, according to a new analysis by the Insured Retirement Institute. That translates to an annual retirement income of less than $7,000.
Those dismal figures explain why just 24 percent of Boomers are confident they’ll have enough savings to last them through their retirement years. That’s down from 27 percent last year and 36 percent in 2012.
Some Boomers are also making moves that could make it even more difficult to catch up on retirement savings. Three in 10 Boomers said they had stopped contributing to their retirement accounts, and 16 percent took early withdrawals. Both percentages are up from last year’s survey.
“Time is running out,” IRI president and CEO Cathy Weatherford said in a statement. “Unless Boomers begin to focus on their long-term needs now and commit to savings, they will need to work longer and make steep cutbacks to make ends meet in retirement.”
That’s already starting to happen, with nearly a third of Boomers saying that they postponed their retirement plans in the past year, the highest percentage in the six years since IRI has conducted the survey. The survey found that nearly 60 percent planned to retire at age 65 or later, and 26 percent said they’ll work past age 70.