More depressing news from the most self-satisfied, self-absorbed and altogether selfish generation of my lifetime. Unsurprisingly it has now spawned the Tea Party, much as manure kept in the dark grows mushrooms.
Too many boomers have ignored or underestimated the worsening outlook for their finances, says Jean Setzfand, director of financial security for AARP, the group that represents Americans over age 50. By far the greatest shortcoming has been a failure to save. The personal savings rate — the amount of disposable income unspent — averaged close to 10 percent in the 1970s and ’80s. By late 2007, the rate had sunk to negative 1 percent.
The recession has helped improve the savings rate — it’s now back above 5 percent. Yet typical boomers are still woefully short on retirement savings. Even those in their 50s and 60s with a 401(k) for at least six years had an average balance of less than $150,000 at the end of 2009, according to the EBRI.
Signs of coming trouble are visible on several other fronts, too:
• Mortgage Debt. Nearly two in three people age 55 to 64 had a mortgage in 2007, with a median debt of $85,000.
• Social Security. Nearly 3 out of 4 people file to claim Social Security benefits as soon as they’re eligible at age 62. That locks them in at a much lower amount than they would get if they waited…
Many seem to view their plight through rose-colored granny glasses. An AARP survey last month of boomers turning 65 next year found that they worry no more about money than they did at age 60 — before the recession or the collapse of home prices. But in an acknowledgement of reality, 40 percent said they plan to work “until I drop.”