How Much Does the Average Baby Boomer Have in Savings?

Baby Boomers, who were born between 1946 and 1964, are either getting ready for retirement or have already done so. These Boomers will soon be living on fixed incomes, and many Boomers are retiring every day.

But what does the average Boomer have in savings? What, really, can they expect from their fixed monthly check? Let’s run some numbers…because it’s not as much as you may think.

The Average Boomer Has About $200K

According to research conducted by the TransAmerica Institute, the average Baby Boomer only has about $202,000 in retirement savings. For purposes of understanding, if a Boomer followed the “4 percent rule” — that is, a rule that dictates one should withdraw only 4 percent of their retirement savings in the first year, and take that same dollar amount (when adjusted for inflation) each year thereafter — they would only have $8,000/year for retirement.

To put this into further perspective, that means the average Boomer is only collecting about $667/month from his/her retirement savings.

Not Enough for Retirement

While there’s a pervasive belief amongst the younger generations that the Boomers “have it made,” the reality is that many do not have enough money for retirement.

According to GoBankingRates (via NASDAQ), 43 percent of people aged 55-64 had no retirement savings at all as of 2022, and an estimated 17 million people over the age of 65 are considered “economically insecure.”

Why Didn’t Boomers Save Enough?

Part of the reason that Boomers didn’t stash away enough money, according to an analysis from SmartAsset (via Yahoo! Finance) is that Boomers were the last generation to have “widespread access” to workplace pensions.

For this reason, the analysis claims, Boomers didn’t feel the need to stash away money “for a rainy day,” as the old saying went.

No Retirement at All?

While Boomers are struggling with their existing retirement savings, the younger generations have it even worse. According to an AARP Survey, 20 percent of all Gen Xers don’t expect to retire at all.

“America is facing a serious retirement crisis,” said Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. “Congress must act more swiftly to provide the financial support older Americans need and deserve.”

How To Maximize Your Retirement Savings

While it’s too late for Boomers to fully re-enter the workforce, there are some things they can do to maximize their retirement savings and make the dollar stretch longer.

One such way, per SmartAsset, is to consider purchasing annuities. “These insurance products provide returns that mimic a variety of assets, including fixed income and the stock market,” the outlet notes. “When you need retirement income, you can withdraw as needed or annuitize your balance for guaranteed income like a pension. The monthly annuity payments are a combination of principal and interest. Your principal is returned tax-free.”

And, as always, consider consulting with a financial adviser to discuss additional options that suit your needs.

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This post was previously published on Wealth of Geeks.

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