Top 5 Reasons Why Baby Boomers Are Screwed

At 56 my mom is smack dab in the middle of the Baby Boomer generation.  For some reason, she still thinks that she’s pretty young and hip.  Her new obsession has become the weekly sales at Macy’s. I’ve tried hard to tell her that she’s getting old and needs to begin preparing for retirement, but, she somehow thinks that 50 is the new 40.  Instead my mom is busy updating her look from somewhere near 1984 into 2001.

I know that at some point reality with hit her like a brick wall, because Baby Boomers, things aren’t going to be as simple as you thought it would be. In fact, I think that a lot, okay most of you guys are pretty much screwed.  Here’s why:

    1. You’re Not Going To Work Until You’re 65
      You might want to stick it out, but, there is always someone younger, smarter, cheaper, and heck, cuter, breathing down your neck.  They’re hungry for a paying position, and they want your job.  To be honest, I want your job.  Your tenure and long work history means that you’re often able to command top dollar.  You’re expensive to maintain, and your employer would rather fill your seat with someone else.  We used to worry about work going to China, India, and other developing countries.  While that might very well still hold true, the greater threat to the average working John & Jane Dough is the person waiting in the wings (me), plotting to take their jobs. Hey Bill Gates, say hello to Mark Zuckerberg. But, the truth is that you can’t really blame us… I mean them. You know what I mean.Think about everything that the youth of today has to deal with.  They internalized the same cookie cutter advice that was preached from every corner of the universe, and many came out on the losing end of the proposition.  “Go to school,” they were told.  The better educated you were, the better (read: higher paying) job you would find once you finished school.  Now, the average college student will graduate with a debt load of over $25,000, and that’s just for undergraduate study!  By the time I finished grad school I had borrowed total of about $75,000. You could feed a family of four in developing nations for years on what I spent just going to school.  My salary is nowhere near what I spent going to school. I could kick myself.  I need a raise.  Or your job.  When are you retiring anyway?
    2. You Haven’t Saved Enough for Retirement
      We know that we should be saving as much money as possible for retirement, but the fact is that we are not doing it.  The 401(k) contribution maximum is $18,000 for 2015, plus a catch-up maximum of $6,000 for individuals over age 50.  If you’re my mom’s age, you can sock away $24,000 tax free, but how many of you will take advantage of that? I would venture to guess that some of you are even leaving cash on the table by not making enough of a deferral to reach your employer’s maximum matching contribution.  You should be ashamed of yourselves.On average Baby Boomers have saved just $149,400 in their 401(k) accounts.  It’s hard socking away money for the future when you’re having a hard time living today.  Believe me, I know that. Unfortunately, when the time comes that you can no longer work, you probably won’t have enough money to keep living at the same standard.  A downgrade of lifestyle and living expenses is the most advisable thing to do, but some of you are probably thinking that you can just live on Social Security.  I think that you’re wrong.retirement money - Baby Boomers
    3. Social Security Isn’t Going to Cut It
      We have seen the political debates go back and forth about the viability of Social Security.  It’s been called everything from “social welfare” to a “Ponzi scheme”.  Whatever you call it, and whatever your political views, I’m here to say that you shouldn’t count on Social Security as your sole retirement income, no matter who is in office.  Social Security is projected to become insolvent by 2037 if Congress does not act. What will happen before then?  Will your benefits decrease?  Will Social Security change from its current form into something else?Does anyone remember George W. Bush’s suggestion that you be given your money back to invest it into the stock market?  Do you remember how the market crashed and you lost 30% of your portfolio?  Depending on where you retire to in this country or another, Social Security might just be enough to live on.  But, have you thought about rising medical costs?
    4. Medical Care Isn’t Cheap And You’re Living Longer
      Back in the 1950’s the average life expectancy for men was 65.6 and 71.1 for women.   The advances made in modern medicine have resulted in the average projected life expectancies rising to 75.7 for men and 80.8 for women in 2010.    While we love you and want you around for as long as possible, the truth is that those advances have come at an astronomical cost

      In 2009, the government spent an average of $8,086 per person on Medicare, but estimated back in 2004 that the average health care cost per person over 65 was $14,797.  There is a significant gap between what was covered and what was actually spent.  Unless you all move to Canada those costs will continue to rise.  Healthcare costs are the leading cause of personal bankruptcy.   But you have a plan to avoid that.  Maybe you can live with your kids.
    5. Your Kids Can’t Support You
      Heck, not only can we not support you, but chances are that we need help too.  Have you found yourself becoming the bank of mom and dad?  It’s because we don’t have the same opportunities that you did to make a decent living that would support your family.  If you would ever let go of that cushy JOB that you’re holding on to with the death grip, we might have a chance.   I digress.

      Some of you might have allowed your adult kids to move back in with you because they’re having a hard time supporting themselves.  Some of you might be living with your kids while they are in the process of starting and supporting their own families. They call people like me, Generation X and a smattering of Generation Y’s, the “sandwich” generation. We’re the meat stuck in the middle between two slices of bread.  We just keep getting squeezed from both ends, and there’s no lettuce and tomato to cushion the blow.  I don’t know what that means, but it sounds good, so let’s just go with it.

So, what do you do? At the very minimum you should be contributing the legal maximum to your retirement accounts. You should also think of eliminating your largest debt, which is probably your house.  Look into purchasing long-term care while you’re still kind of young and sexy. And finally, make a comprehensive plan for how your would like to spend your retirement. That will ultimately determine how much money you need to sustain you.

Finally, make sure that you let me know before you retire so that I can put my resume in. I come with references.

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47 thoughts on “Top 5 Reasons Why Baby Boomers Are Screwed

    • The problem for you is exactly as you stated, that you are a low-wager earner. Is there a skill that you could add that could result in a higher wage? Could you lobby for a raise? Could you find a higher paying job? If not, then you’re consumed with the reality of just the cost of daily living. The fact is, you can only cut so much out of a budget before you really begin to need earning more. Is there a skill that you have that you can exploit in your spare time? Can you knit? Bake? Draw? Write? Any of those skills could result in your making a little but more money on the side. Check out Help! I Need Money.

      If you’re hardly making enough to live on (and that all depends on where you live and your entire living situation) then it IS hard to save for retirement. The good thing is that if you are able to live in $17K annual income now, then Social Security was tailor made for you because you should be able to maintain the same lifestyle with your Social Security benefits. Good luck!

      • Thanks Sandy, that was a great tip.

        I have been doing research on the side for a project which I hope to turn into a published book and also a website.

        I’m aiming to launch the book at a specific collector convention in the fall, although I suspect that conventional publishing turnaround times will make this year’s event infeasible.

        The idea of a virtual assistant is intriguing – actually I would be very interested in hiring one for this project if I had the money, which I don’t really have.

        While I expect the book to be profitable – as it fills a niche void of any resource comparable to my proposed book – I’m in a chicken-and-egg bind. The project would generate cash if I had the cash to complete it faster by hiring someone, but I don’t have the cash, so I can’t hire someone, and it’s a really big project for one person. (Which is probably why nobody else has tackled it.)

        Then again, the website also has an obstacle as I have neither the technical skills nor the cash to pay a developer. I do have a potential partner who wants to do the website with me (each of us has specific content which when combined would make for a very useful fan/collector/dealer site, but he just did a lot of work on his house and he’s not currently flush with cash. (Obviously, I’m never flush with cash.)

        I’m feeling a little frustrated because I see significant money down the road but no cash flow until it’s ready for launch. (Kinda like a starving artist or maybe J.K. Rowling might have felt before the money poured in.)

  • Love this post. The Baby Boomer generation is in for some serious trouble. They fought for equality and civil rights, then became complacent and sold their souls to the God of Trickle Down Economics in the 80s.

    And everyone is paying the price now.

  • Yeah, my mom is 63 and I’m having a hell of a time trying to find health insurance for her. She doesn’t have a lot of saving, but her expense is pretty low so… We’ll help out, what else can we do?

    • What can you do? Really? We can’t say no. But, if there are any social programs that she qualifies for, I’d start applying. Tough it out for another two years then get her on Medicare as fast as you can.

      I’m already dreading when my brother and I are going to have to start paying for my mom and stepdad.

  • Will they hear the wake up call? Too many people of every generation are not listening. It is up to each of us to do something for ourselves for retirement. Social Security is bare subsistance!

  • “You might want to stick it out, but, there is always someone younger, smarter, cheaper, and heck, cuter, breathing down your neck”

    Wise words. I have a post in the works on this topic, based on a conversation I had with a friend. I think this idea of working late into life is based on the assumption of holding value in the marketplace as an employee or service provider, which in reality doesn’t always happen. It may not be fair (I don’t think it is), but it is what it is. Best to deal with reality.

    Save as much as you can, as early as you can, while you still have the opportunity to.

  • Hello Sandy! Hope you aren’t addressing “all” baby boomers. I happen to be one and you have me pegged all wrong. I have been saving for my retirement and am debt free. Yup, I was frugal before frugal became popular. Not to be smug, hopefully, I will retire with a pension and health insurance – and hope I won’t need my 401K equivalent (of which I am saving the max) – well before I am 65 🙂 Don’t be so hard on your mother, she isn’t the only one saying that 50 is the new 40 🙂

    • No, no, no. There about a few of your doing things the right way. Take my boss. He’s 57. His house is paid for. He has $250K in his 401K and has other retirement accounts stashed that I don’t know about. He wants to retire early in another 2 years. He knows that I’m after his job!

      • Sandy, I hope your work ethic is better than your grammar. FYI, my husband and I just retired. We cut our expenses to the bone, paid off our home, and yes we have a pension. But our annuity is shy a couple of hundred thousand dollars, because we paid to put our children through college. Unfortunately, neither can get a job in their field. Fun times, although our son has volunteered to help us in the future, should we need it. That’s what family is for!

    • I am pretty insulted by your article. How did we, I am 60, have it so much better than you all? I worked 2 and 3 jobs, part time or full time, cleaned peoples houses, waitress, window washer, did all kinds of work to support me and my child, my hubby was long gone trying to find himself. I started clerking at a construction site when I was 30, worked on and off, good wages SAVED all I could. I worked summers at a farm market,wages and free produce. on the constructionjob I am now on, we have troble getting workers. No one wants to get dirty. I NEVER told my daughter to go to clollage, I told her to go to work. THe more people get an education, the less they make. Case in point, daughter went after a 2 year degree. she had been workign at a lawyer’s office, $14 an hour. After graduation, went on to $12 an hour. Good move eh? She went out and started her own business, vegetarian food cart, doing ok, in a collage town, working her tail off. But she is trying. that is what I did as a baby boomer, when my 2nd hubby had a stroke at 57, I took care of him, now I am back at owrk. I get calls to go to work, every week, I dont ask for a forever job, or any help any where.I am sorry for misspelling, my eyes have recently lost thier virtouse linings and I see through grey floaters, and yes I am still working full time, 72 hrs a week actually. Yeah, many people want my job, but not many will put up with the dirt, portapotty, short duration of work, then off. I save when I am working. I really resent your article, many of us owrked hardo ur whole lives, saved and just want to live and enjoy what we did not when we were working. I cant even tell you the last time I bought anyhing new, always shop at thrift stores. Dont lump us all together.

      • Jeannette,

        Don’t take it personally. Read the article for what it was: a tongue-on-cheek reference to how many Boomers are not prepared for retirement (my mom included) and a warning to the next generation (mine) to prepare for their own retirement. The fact is that many people my age were counting on their education getting higher paying jobs and it’s not working out that way.

        Good luck to you and your family.

    • I’ve already told my mom that I’m going to pretend to not know her in another 10 years. She’d better get her act together. I told her to buy an investment property, but she’s nervous. Something about my experience with my tenant from hell has her hesitating… 🙂

  • The bottom-line is that recent generations of Americans have not saved anywhere near enough to retire. Shame on them, BUT it will be shame on us because future generations will most certainly bail them out. Which means future generations will be destined to repeat this behavior because there is no downside to such behavior. Right now, my biggest focus is on 1) saving more 2) minimizing taxes and avoiding them anyway I can…

  • Another aspect that is endangering baby boomers is that pensions and retirement health care that they were promised is evaporating. They are still receiving something and that’s better than nothing, but their entire generation has planned on receiving something that isn’t their and definitely won’t be there before they depart from this world.

  • I plan on being a burden to my children. 🙂

    Boomers stand a much better chance of collecting longer on SS than the younger generations. My advice to my Mom and Dad: get all you can while you still can.

  • I think not having saved enough for retirement is the single biggest risk to boomers. The Social Security thing is a non-issue for the next decade or two in my opinion. Not because the program is by any means solvent. But because this current cohort is a massive voting block and only growing. There’s no way politicians will touch THEIR social security – they’re going to screw the current generation of young workers and our children.

  • The boomer generation is also the first generation in a long time that had to rely on their own savings and not a company pension plan (well, I guess everyone but government workers that is).

    I am the sandwich generation and I don’t know what I’d do if our family didn’t have 2 good incomes to rely on. My mom got a late start in life and still managed to do pretty well, but it would be very difficult for her to live on SS alone.

  • Ah, truer words were never spoken.

    As time progresses, I doubt the virtues of the 401(k) more and more. However, I don’t think I’m being totally fair. The 401(k) is as much of a problem as the person who owns it. It’s only a vessel, and we’re responsible for its contents.

    As you indicated, I think a lot of baby boomers were delusional when it came to how long they’d need or be able to work. I also believe many financial experts did them a disservice by recommending they invest 10% of their income in retirement accounts. Without pensions – a lot of boomers don’t have one – the correct percentage is likely closer to 15% or 20% or greater. For us younger folks, I’m scared the number might be higher than that given the state of Social Security. Unless you have a whole bunch of money saved/invested, your mortgage needs to be paid off when you enter retirement. Forget about the tax break. It’s not that great.

  • I do not agree that things are this bad… Why not take a look at retirement lifestyles that cost less but are still fun and safe… We have lived on a sailboat in the Caribbean; we have full-time RVed; we have downsized; and we have lived in foreign countries.

    Especially living in a foreign country there are many places that you can live well on your Social Security income… Including healthcare…

    Let’s not give up until we explored all the options available to us.

    • You’re probably one of a handful living a nice life of adventure. I’m guessing that most people will retire to their current countries. But, I did make a provision for people who decide to retire in an unconventional way and live off their Social Security money. I just don’t know how many people are willing to move to Costa Rica (very welcome to retirees) or Mexico to live.

      • Thanks Gary,
        Most people are not willing to look outside of their comfort zone to retire.

        Thanks to your suggestions Gary (Congrats on 37 BTW) Sheri and I are now living on our boat and having a ball.

        Boomers are only screwed if they allow themselves to be screwed. Most have been conditioned that they have to accept the “status quo” or that anything different is “unconventional” and should be shunned.

        Mike

        • Mike,

          Thanks for the kind words…you are so right…if you think you are screwed…you are letting other people do your thinking for you.

          All the best, fair winds

          Gary

  • I am 53 and retiring in June. I refuse to spend another minute supporting our current administration. There are MANY frugal ways to retire. Do not feel that you are stuck just where you are. Why? Because it is all you know?? Because your children are here?? Hey, this is YOUR life. It is time for YOU! So, OK, you may not have a mansion but, really, do you NEED a mansion? Get out people. Have fun! Remember when your parents said that life is short and it gets shorter as you age?? Well, IT’S TRUE!!!

    Take a good hard look around. Make your children visit you!! The medical bills, well, people on welfare have no problem with that! Why should you?

  • The most important thing to have as we age is physical and mental health. Good health will enable you to be creative to solve problems, and work if needed.

    I am 61 and broke (for various reasons) and have decided to go back to college to get a post graduate degree in Wellness. Why?(1) the anti aging subject interests me (2) I can’t afford healthcare from the ‘sickness industry’ (3) I can’t get a long-term job and (4) the knowledge will provide long-term employment (self or with others) that I can do into my 80’s – and be happy doing it.

    I can get part-time work as a truck driver, for which I am overqualified. But that is OK. It provides the living funds to get through college.

    Be healthy.

  • Uhhh,
    this author sounds remarkably like a WALL STREET SHILL!! LOL.

    Move to Haiti. That’ll make you appreciate life for what it is: suffering with a smile on your face at the mall, huffing down a 5500 calorie lunch at the cheesecake factory while kicking back a carton of smokes this weekend.

    You look around the States. Appalling! People fatter than cattle & dumber at that. Comparing the average USDolt to the bovine species is a true insult……TO THE CLOVEN HOOFED wonders that they are.
    Plus, the cow is a very useful & productive animal (only eats what it needs too!) ..where the human does nothing but destroy everything in its path, moves on & destroys again. You know, the pale ones..

    We’re not screwed, screwed is a nice word

  • I would like to say something about baby boomers whom I am one. I can remember someone I met that worked for UPS back in 1979 he was earning 10.50 an hour back than. Today if you work for UPS and do the same type of work that this guy did at UPS back in 1979 you would still be making just 10.50 an hour today. Very little of the increase in income has gone to the workers over the last thirty years. I do not believe that the recent jobs report is really anything to get very excited about. If you take a deeper look into the data you will find that much of the increase in employment was temporary employment during the last couple of months of the year. I believe that much of the current employment problems stem from a lack of real wealth creating companies. Untill the country gets away from all the jobs in the financial service sector. I believe that the unemployment situation will not improve. Jim Rogers has stated this in many of the interviews that he has given to the news media that the financial services sector is much to large. Jim Rogers also believes that the savings rate must be much higher if we are to sustain any high degree of economic growth. Many retailers can make more money loaning money to their customers at 20% interest than they can make selling product to their customers. What does that tell you about jobs.

    • It is a tough cycle, and you are absolutely right about wages being essentially frozen while the cost of living has steadily increased.

      I am the first to admit that our entire system is broken, but what do we do about it? Our politicians are stuck arguing with each other, but they will retire to great pensions at our expense. In the meantime what are you and I to do?

      Honestly, if you’re not making a 6-figure salary, and you’re trying to raise a family, can you really save enough to retire on in a 401(k)? I don’t know what the answer is, but I know that we are all headed for a world of hurt.

  • Just found your blog and having been reading a few posts back. Very entertaining read. I am a baby boomer, I’ll be fifty this year. Too right I am not working to 65, the absolute latest I am going to work is 60. We baby boomers are used to having things on our terms. After that one of the cuter, smarter ones can have my job. I intend to be enjoying my pension at that point. That’s kind of why 15% of my salary gets stashed in my pension fund every month. I sincerely hope I don’t need to claim social security after making forty years of effort but i like the idea that it is there just in case. Medical expenses – no worries – I love the NHS, and when I retire even prescriptions will be free. Kids taking care of me? They have no chance. The world is so much harder now that I will be taking care of them for years to come. But as a parent that is pretty much my job. I guess there must be plenty of people my age that didn’t plan & the economy going down the pan has made things a lot worse, but don’t worry about us. Life was way way easier for us than it will be for our kids. Don’t worry about us BB’s, its our kids that need the help. I like how you made me look at my options there and realise how lucky I am. Thank you.
    Lizzie

  • Ack! Scary thoughts! I’m really thankful that my parents and in-laws have saved well for retirement. And, I’m glad that I’m putting the federal max into my 401K every year. My husband and I have been saving for retirement since age 22, which I’m really happy about!

    • That’s pretty badass! I started my first 401(k) at about 20 as well when I had NO CLUE what is was. All I knew was that I paid less in taxes. That was incentive enough alone.

  • Wow! I’m 55 and my son and grandkids just moved in with me!
    Not sure my take of this article should be panic or acceptance.
    Great article! Finally someone stated the facts without sugar coating it!

    Maybe a glass of wine would help,

  • Hmm.. interesting post! I am in Canada and there are some huge benefits to being in the Great White North, but Generation Y has already been stuck with paying for the boomer’s retirements around here. Because of the huge influx of people retiring (since there are so many boomers), the retirement age when we get social security has been increased to 67 for our generation.

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