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The boomer retirement crunch begins

With scarce employer benefits and recession-ravaged 401K's, retirement for many boomers is looking tight.

By MSN Money Partner May 13, 2013 6:45PM

This post comes from Emily Brandon at U.S. News & World Report.

from MSN partner site USNews & World Report/MoneyThe oldest baby boomers have already turned 65, and the older population of the U.S. is beginning to swell. The age-65-and-older population grew 18% between 2000 and 2011 to 41.4 million senior citizens, according to a recent Administration on Aging report.

partner on MSN MoneyThese numbers are expected to further balloon over the coming decade as baby boomers continue to reach traditional retirement age. Here's what retirement looks like for the typical person age 65 or older in the U.S.:

Low incomes

Most retirees have very modest incomes. The median income for people age 65 and older was $27,707 for males and $15,362 for females in 2011. The typical household headed by someone age 65 or older had a median income of $48,538. The median income increased by 2% between 2010 and 2011 after adjusting for inflation. Almost 3.6 million elderly people (8.7%) lived below the poverty level in 2011.

Reliance on Social Security

The most common source of retirement income is Social Security, and 86% of people age 65 and older receive monthly payments. Social Security is responsible for 90% or more of the income received by 36% of beneficiaries.

Only about half (52%) of retirees receive income from their assets. Even fewer retirees receive monthly payments from private (27%) or government (15%) pensions. "The boomers will be the first generation to overwhelmingly not receive some sort of guaranteed benefits from employers," says Ken Dychtwald, president of the consulting firm Age Wave and author of A New Purpose: Redefining Money, Family, Work, Retirement, and Success.

"We now live in a 401(k) world where people are responsible for our own savings, and baby boomers have not done a very good job. It's a generation that is going to struggle in old age in the absence of reliable anchors and support systems."

Continuing to work

A growing proportion of the older population is continuing to work during the traditional retirement years. Some 18.5% of Americans age 65 and older were in the labor force in 2012, according to the Bureau of Labor Statistics, including 24% of men and 14% of women. Young retirees between ages 65 and 69 are the most likely to be working. 

"For a lot of people, they literally need to work. Work has also increasingly become connected with the sense of the meaning of life and the purpose of life," says Marcie Pitt-Catsouphes, director of the Sloan Center on Aging and Work at Boston College. "The same person might have reasons from each of those categories."

Staying put

While many people fantasize about moving someplace sunnier or more interesting, most people retire where they spent the final years of their career. Between 2011 and 2012, only 3% percent of people age 65 and older moved, compared to 14% of people under 65.

Most older movers stayed in the same state (83%) and the same county (61%). Only 16%  of people who traded spaces after age 65 relocated out of state or abroad. Most senior citizens (81%) also reside in metropolitan areas. "We find increasing percentages of people living in urban areas as age increases," says Amy Symens Smith, chief of the age and special populations branch at the Census Bureau.

Making it to Medicare

The older population is much more likely to have health insurance coverage than younger counterparts. Almost all Americans (93%) age 65 and older were covered by Medicare in 2011. And 86% of retirees also have supplementary coverage that fills in some of the gaps and cost-sharing requirements of traditional Medicare.

Longer retirement

The average life expectancy for people turning age 65 is an additional 20.4 years for women and 17.8 years for men. Older women significantly outnumber retired men. There are 23.4 million women age 65 and older, compared to 17.9 million older men. "Today people reach 65 and they think they are going to live to 85 or 90 or 100," Dychtwald says. "More and more people are getting wind of the idea that living a long life is not a certainty, but a strong likelihood."

More from U.S. News & World Report:

May 14, 2013 12:18AM
I'm 63, retired at age 58, paid cash for a brand new Vette  when I retired. The house is paid for, and the kids are done with college. (paid for that too). Worked 35 years in construction, and got a great pension. Worked hard, saved hard. Didn't get any help from my parents either. Been to Australia, South America, Europe, Africa. In 3 years I'll file for social security, and then when I'm 70, start cashing out some IRA'S, annuities, etc. I think the key is to not get over extended with credit, and to keep your expenses low. I use to tell all the young guys not to blow their "dough", but I don't think they cared. Lot of partying "grasshoppers" out there. Plan well, and you can have anything you want.
May 14, 2013 2:03AM

It doesn't have to be scary.

Spend less than you make.

Drive paid off cars.

 Women- stay out of the mall and don't jack up credit cards.

Guys - not too many guns, golf and strip clubs.

Don't buy into conventional wisdom and drown in mortgage debt and property taxes.

Then you don't have pay attention to scare tactic articles like this.

Works for me.

Well, maybe except the golf part.

May 13, 2013 9:05PM
Damn right it's scary ...
when the filthy, thieving politicians are spending it faster than we can pay it in.

May 14, 2013 4:17AM

i was laid off from my company so NO wage income since mid 2010.  i get soc and a VERY small pension(w/NO COLA)  for a total income UNDER 30k/year right now..


House is paid for

Car is paid for

Kids grown & gone

NO credit card debt but do use them as PLANNED


I am making it, reasonably comfortably.  Could I use another 1020k/year.  Sure.  Who couldn't?

May 14, 2013 8:16AM

I just need some peace and quiet, an occassional cigar, and a sip of bourbon.


I'll get by okay.


May 14, 2013 11:10AM
If the politicians want to continue spending more money than they have coming in, let them raid their own retirement fund.
May 14, 2013 8:20AM
I worked hard and started my own software company when I was in college.  I'm now semi-retired at 43.  But even though I made a lot of money, I still didn't run up credit when I was young.  Unnecessary credit is a killer to a sound retirement.
May 14, 2013 6:36AM

What is frightening is that Social Security, a safety net originally intended to be a supplement only and to eliminate County Poor Houses for the elderly, has become the major source of old age income for so many people!


My wife and I plan on being fully self-sufficient in our eventual retirement, and have spent the past 30+ years making those plans feasible.

May 14, 2013 6:48AM
$48,538 a year don't sound scary. 
May 14, 2013 10:17AM
You can plan well all you want, gives you a much better chance but that hardly means things will always work out. Some folks literally lucking into a Job for Life while some actually worked for what they have. So many folks have what I called Legacy Jobs which are mostly GONE. Today's new workforce is facing a vastly different workplace. Some folks are so lucky to be in their position and don't even realize it.  Point being be carefully about bragging about what you have, it could all be gone tomorrow. In order for most folks to not be over extending, you have to have a Job paying a Living Wage. Those are in short supply these days. So go ahead, pat yourself and others for being fortunate in life. Things could just have easily been unfortunate. Planning well give you a CHANCE to have anything you want in life, it never guarantees it.

Economies are Not built so that Everyone can have everything they want regardless of how you might plan. Just like the lottery was never built so that everyone will win. If they did, guess what the payout would be. That's the dirty little secret that folks never talk about.

May 14, 2013 8:47AM
You have got to live within your means.  It depends on if you can make it to medicare in good health.  If you get sick sooner with something serious your in trouble.  It is such a crap shoot.  I'm not working until I die government.  No way. 
May 14, 2013 11:28AM

I find it very disappointing that the government is not looking at ways to deal with the pending retirement issues.  The only plans I hear coming from both the Democrats or Republicans is to reduce benefits and raise taxes.  Oh and lets not forget reducing the yearly inflation adjustment and making us work longer.  I fail to understand how they think taking more money away from me in the form of taxes or reducing my future benefits, is going to help me save more for my future retirement or live a better life in retirement.


The fact is we are in this retirement battle alone.  Do not plan on the government helping you.  Do not plan on your employer helping you.  Save as much money as you can in a Roth IRA.  Then be prepared to hide the money when the government decides you have too much and they come to take it away from you.

May 14, 2013 12:44PM

Baby boomers are the tip of the iceberg.  The income and dividends from savings and investments decrease while everything else increases: food, fuel, taxes, utilities etc.  Whatever the baby boomer generation is forced to endure and make due with now, the generations following will be be even worse off.


The company sponsored pensions that were administered by reasonably ethical business men and women being replaced with 401 K's which are administered by crooks and Wall Street manipulators is the second worst economic misstep by the governing body of this country.  Globalization, free trade and the subsequent removal of good paying American manufacturing jobs would be the first. 

I think my grandparents were the last generation to really have a good retirement and even then it was tight. If not for grandpa's civil service healthcare they'd have fallen to the bills when they both got sick. now companies can't keep up with those good benefits they promised because of too many retirees.
May 14, 2013 11:28AM

People need to be able to say "NO" to their kids and to retailers.Of course, that would

cause a recession.

May 14, 2013 12:59PM

The one big problem for those of us 75 and older is having enough insurance(medical) to cover the very high cost of Hospital care, and our drugs. Property insurance, and property taxes continue to clim EVERY year, but most of us are not enjoying incomes to offset these costs.

I do worry about this younger generation that are not saving enough for old age. The town I live in has a population of about 30,000. It's a wonderful town to raise your children, but they are not building enough housing for those earning an average income. Some couples are buying new houses costing over $200,000, - $300,000. This leaves them very little to put away for a rainy day, and those days will come sooner or later. New vehicles here are selling like hot cakes, and these youngsters are buying them and taking 5-6 years to pay for them. That's not good planning on their part. Fortunately, we have taught our children(they are now in their fourties and fifties) and are careful not to take on too much debt. Most of them drive 5 year old cars, and live in nice houses that cost less than $200,000. And they are saving for retirement. Our country is in for a tough economical

period that is coming soon.

May 14, 2013 11:07AM
Everyone is so obsessed about retirement.  Guess what, you'll eventually get there and by the sounds of things, you will all have missed out on your life's because of your obsessions with retiring.  People weren't meant to live to be real old, you were supposed to live your lives when you were young.. You'd better start doing it because you just might retire and die the next day, having never lived your lives.  You wasted them away worrying about being old.
May 14, 2013 11:15AM

It is regettable that while the wealth class continues to grow their assets, the middle class will continue to decline into the poor class.  Salaries have not kept up with inflation since 1999.  There is no way that the median middle and lower middle class can afford to save for retirement anymore.

Housing developments are showing the future with the construction of "family compounds" as the only way families will be able to afford the median price of new homes.  Only the combined efforts of multiple families / multigenerationals will be able to buy "the American dream" in the future.

Child labor will be pushed as even 2 income familes will soon not be sufficient to support an income to support a family anymore. As the majority of the US citizens declines into third world living standards while the wealthy hoard all the wealth... again.

May 14, 2013 1:40PM
I started planing my retirement while still in my 20's. NEVER had a credit card until 55 years old, NEVER bought a new vehicle until 52 years old, NEVER bought anything on credit except my house. I saved every dime I could and never hired anything done that I could do myself. After retirement I educated myself on finance and investing. Now at 67 years old, I enjoy a half way comfortable retirement dispite the government trying their best to fleece me out of my hard earned retirement. Oh, I forgot to mention, I started out with NO money at all (growed up dirt poor) and have NEVER inherited any money at all. Besides my regular job, I even mowed grass for people and put it into one of my retirement accounts. You can be set for retirement by setting goals and working hard and always being frugal.
May 14, 2013 6:21AM
When can thank the government for this mess we are in, the government made the call for companies to do away with retirement plans and started the 401k plans..If anyone like myself was already to old to get involved in a 401K, and didn't make enough weekly pay to put anything aside..Also not all companies made a match payment, people should have known this..You need a few million dollars in the 401K to make it worth your wild when you retire...The government has us right where they want us, poor while they bask in the sun...

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