Two-thirds of peak boomers are facing a retirement cliff
A majority of Americans who are set to retire between 2024 and 2030, known as peak boomers, are not adequately prepared financially, according to a new study commissioned by the ALI Retirement Income Institute.
The analysis by Robert J. Shapiro, former undersecretary of Commerce for economic affairs, highlights the economic challenges faced by the youngest and largest segment of the baby boomer generation.
The study projects that 30.4 million Americans will turn 65 by the end of this decade, marking a substantial demographic shift. Shapiro’s findings indicate that two-thirds of these individuals may struggle to sustain their current lifestyles post-retirement.
With 52.5 percent of them possessing assets of $250,000 or less, the majority are likely to deplete their savings and rely primarily on Social Security, which is supposed to replace just about 40 percent of an individual’s pre-retirement income. Another 14.6 percent with assets between $250,000 and $500,000 also run the risk of straining to meet their retirement needs.
“America has never seen so many people reaching retirement age over a short period, and well over half of them will find it challenging to meet their needs through their retirements, let alone maintain their current standard of living,” Shapiro said in a statement.
The study also sheds light on the disparities in retirement readiness across different demographics. Median retirement savings stand at $225,000, yet there’s a noticeable variation across gender, race, and education levels. For instance, men have a median of $269,000 saved, compared to $185,000 for women.
Racial gaps are even more pronounced, with white retirees having significantly higher median retirement savings ($299,000) compared to
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