We recently reported how Baby Boomers are meeting the retirement challenges nicely. Unfortunately, all is not as good as it seems. There are some negative findings in the 17th Annual Transamerica Retirement Survey of Workers. These findings state that baby boomers might not be able to work for as long as they wish. It also highlights that baby boomers have low savings, menial backup plans and minimal knowledge of social security.
Why Baby Boomers Won’t Increase their Retirement Benefits by Working Longer?
- Also Read: 4 Ways Medicare Could Affect Postal Employees’ Health Coverage and Out-of-Pocket Costs in Retirement
- Also Read: The Surprising Benefits Law Enforcement Officers Get That Go Beyond Standard Federal Perks
- Also Read: Five CSRS Pension Facts That Could Make a Huge Difference in How You Approach Retirement
Many baby boomers expected to increase their retirement benefits savings by working for a few years after retirement but this may not be possible. The reasons may vary from declining health to lack of job opportunities, says the 2016 Retirement Confidence Survey.
Employers are not Aging Friendly
About 47 percent baby boomers accepted in the TCRS survey that their employers may allow them to work past retirement as they are aging-friendly. The rest of them think that they might not be able to keep the job post retirement. About 29 percent admitted that their employers have made flexible transition arrangements.
Savings Difficulty
About 42 percent baby boomers said that their retirement savings are not enough or too low. The median amount they think they need is about $500,000. But when the 4 percent rule is used as a reality check, the annual income would be just $20,000 per year which is not enough to cover the expenses even when the social security income is added to it.
Lack of Financial Counseling and SS Knowledge
It is believed that financial counseling might help in increasing the savings but only 12 percent baby boomers admit that their employers provide any finance related counseling. About 19 percent of baby boomers accepted that they know a great deal about social security and 34 percent expected social security to be the primary source of income post retirement.
Minimal Backup
Only 25 percent of baby boomers have a backup plan in place if they are unable to work until they plan. About 26 percent said that they have only less than $5,000 to take care of a financial setback such as a medical emergency, unemployment, etc. Lack of a backup plan means that more than 28 percent have taken a loan, opted for early distribution or made a hardship withdrawal from IRA or their retirement benefits savings.
