Baby Boomers Forecast Looking Gloomy

It’s no secret that people are living longer now than ever before. It’s also no secret that people are beginning to work longer than ever before. This may have to do with the grim outlook depicted by experts in the article, “Baby Boomers Are Ready For Retirement, Mostly,” for the generation born from 1946 through 1964.

In the article, an October 2009 report led by Alicia Munnell, director of the Center for Retirement Research at Boston College, stated that even though retirees are currently able to enjoy a decent retirement, “this group is living in a ‘golden age’ that will fade as Baby Boomers and Generation Xers reach traditional retirement ages in the coming decades.” Thus, more often than not, we are finding that the Baby Boomers are winding up “financially ill-prepared for retirement.”

This, perhaps, is due to the ever-changing terrain of retirement plans. The Center for Retirement Research reported that traditional defined-benefit pension plans are going by the wayside, and room is being made for 401K plans. Coverage for workers with the traditional pension plan has dropped from “62 percent in 1983 to 17 percent in 2007,” and coverage with 401K plans has increased from “12 percent to 63 percent during the same period.” However, the 401K plans don’t have a savings rate that is very comforting.

Annamaria Lusardi, economics professor at the George Washington University School of Business, points to a general lack of financial literacy and planning.