25% of Baby Boomers have NO Retirement Savings

by Lance Cashion
One in Four (25%) of the estimated 79 Million Baby Boomers (ages 46-64) have no retirement savings. If you think that is a disturbing statistic, let’s look at a few more.

Below are the findings of a recent Harris Poll (February 2, 2011)

  • 34% of Americans have no retirement savings
  • 27% of Americans have no personal savings
  • 22% of Americans age 65 and older have no retirement savings
  • 14% of Americans age 56 and older have no personal savings
  • 26% of Baby Boomers have no personal savings

If these numbers send chills up your spine, they should. This is your wake up call America!

Reality Check:
Baby Boomer retirement savings must increase. We are all aware of the fiscal crisis that programs like Medicare, Medicaid and Social Security are enduring today. Do you want to bet the farm on the government providing care for you in your retirement years? Syndicated radio host and author, Dave Ramsey has some of the best advice; “Don’t Count on the Government to Provide Your Retirement”. As life-changing legislation rolls out of Washington DC, it is time to become disciplined and intentional about our retirement planning.

Win IN the Future: There is Hope
In the 2011 State of the Union Address, President Barack Obama stated; “Americans must win the future”. The future is barrelling toward us, it can’t be won or lost. What the President ‘should’ have said was; “Americans must win IN the future“. If we want to win IN the future, we must plan properly at the present time. Baby Boomer retirement savings is vital to ensuring quality care and a comfortable lifestyle in retirement. In this case, hope is directly tied to discipline. You are your best hope for retirement!

Where Baby Boomers are investing retirement and personal savings?

  • 28% of Baby Boomers’ retirement is “Relatively equal mix of stocks/mutual funds/bonds/money market funds”.
  • 18% of Boomer retirement is “Mostly in stocks and/or mutual funds”
  • 22% of Baby Boomer personal savings are in Bank CDs

Two risks jump out at me when I see the numbers listed above.

  1. Market Risk (Stocks, Mutual Funds, Bonds & Money Market funds)
  2. Inflation Risk (Bank CDs)

Discipline: Planning for Retirement

  • 3-6 months of living expenses should be held in a accessible savings or money market account
  • A portion of your retirement should be in the markets (based on your age).
  • A portion of your retirement should be in a safe place where it is guaranteed to grow regardless of market behavior (or inflation) and provide a guaranteed income for the rest of your life. After all, you do not want to outlive your money and you want to leave a sound financial legacy to your loved ones.

Never Too Late: Call to Action
This is your reality check! As Baby Boomers retirement draws near, employ conservative strategies to insure a portion of your retirement. It is never too late!

Question: Do you have a retirement plan? (comment below)
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Article and Statistical Information Credit: By Humphrey Taylor, Chairman, The Harris Poll, Harris Interactive

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.