If you’re like most people, you’ve probably heard the term “Baby Boomer” but don’t know exactly what it means.
A Baby Boomer is someone who was born between 1946 and 1964. Perhaps you’re one yourself!
As this huge generation begins to retire, their finances are becoming an increasingly important topic.
So what does a typical baby boomer’s financial situation look like? Let’s take a closer look at some baby boomer financial statistics worth discussing.
About Baby Boomers
According to a recent study, baby boomers are facing some serious financial challenges. Many Baby Boomers have no retirement savings at all. In addition, many baby boomers are still paying off mortgages and other debts, like student loan debt for themselves and their children, and they face the prospect of rising healthcare costs as they age.
As a result, many baby boomers are worried about their financial future and whether they will be able to retire comfortably.
While these statistics may be alarming, there are some steps that baby boomers can take to improve their financial situation.
For example, they can start saving for retirement now, even if they haven’t yet reached their peak earning years. They can also make sure to pay down their debts and build up an emergency fund in case of unexpected expenses.
By taking these steps, baby boomers can help secure their financial future and enjoy a comfortable retirement.
The statistics below will help answer some of the following questions:
- How much money does the average baby boomer have?
- How much does the average baby boomer have in savings?
- How do baby boomers have so much money?
- What percentage of baby boomers are wealthy?
…and more!
Baby Boomer Financial Statistics – Highlights
- Baby Boomers have an average of $152,000 saved for retirement.
- 45% of Baby Boomers have no retirement savings.
- 28% of those Baby Boomers who do have retirement savings have less than $100,000 saved.
- About half of all retirees plan to live off their Social Security benefits entirely.
- The average Social Security benefit was $1,555 per month in 2021.
There are 73 million Baby Boomers in the US
(Source: Census Bureau)
The quote is referring to the baby boom that occurred after World War II. In the years following the war, there was a significant increase in the number of births in the United States. As a result, there are now 73 million Americans who are part of the Baby Boomer generation.
This generation is currently reaching retirement age, and their retirement is having a major impact on social security. In addition, the large number of baby boomers is also having an impact on healthcare and housing. The baby boomers are a generation that is changing the landscape of America.
This generation has “earned record levels of income, generated great wealth, and spurred economic growth”
(Source: McKinsey)
The main reason for this is that they are the first generation to benefit from social security. Without social security, many retirees would be living in poverty.
In addition, World War II spurred economic growth by creating jobs for millions of Americans. As a result, this generation has been able to enjoy a higher standard of living than any other generation before them.
22% of Baby Boomers admit to making purchases without telling their spouse – and don’t ever tell them
(Source: Finder.com)
A recent study by a financial institution found that 22% of Baby Boomers have made purchases without telling their spouse.
This number is likely even higher among the Silent Generation, as many Boomers likely learned from their elders not to discuss financial matters with their spouse.
This reluctance to communicate about money can lead to financial difficulties down the road, especially as younger generations are generally more open about discussing financial matters. Most financial institutions recommend that couples have regular conversations about their financial goals and spending habits in order to avoid any misunderstandings or surprises down the road.
Baby Boomers have an average of $152,000 saved for retirement
(Source: TransAmerica Center for Retirement Studies)
This is a significant amount of money, and it shows that the Baby Boomer generation is committed to maintaining a comfortable lifestyle in their golden years. However, it is important to remember that this is just an average, and there will be some people who have saved more or less than this amount. Regardless of the exact figure, it is clear that the Baby Boomer generation is financially prepared for retirement.
The average Baby Boomer spends around $48,885 per year on expenses
(Source: Bureau of Labor Statistics)
This includes both essential costs, such as housing and food, as well as discretionary spending on items like travel and entertainment.
While this may seem like a lot of money, it’s important to remember that Baby Boomers are nearing retirement age and often have fewer financial obligations than younger people. In addition, many Baby Boomers are still working and earn significantly more than the average person. As a result, they are able to afford a higher standard of living.
However, it’s also worth noting that the cost of living has increased significantly over the past few decades, so even retirees on a fixed income may find it difficult to maintain their standard of living.
45% of Baby Boomers have no retirement savings
(Source: Insured Retirement Institute)
This is a worrisome trend, as retirees typically need to have enough saved to cover at least 10 years of living expenses. There are several factors that contribute to this problem.
For many Baby Boomers, the 2008 financial crisis hit just as they were approaching retirement age. As a result, many lost a significant portion of their savings and have been unable to rebuild them. In addition, the rising cost of healthcare and other essentials has made it difficult for many to save as much as they would like.
As a result, many Baby Boomers are facing retirement with very limited resources.
Only 26% of Baby Boomers have a backup plan for retirement income if forced into retirement sooner than expected
(Source: TransAmerica Center for Retirement Studies)
This is a cause for concern, as many baby boomers are nearing retirement age and have not saved enough money to support themselves. There are a number of reasons why this may be the case, but one of the most common is that people simply do not plan for the possibility of an early retirement. Another reason is that people underestimate how much money they will need in retirement. Regardless of the reason, it is clear that more people need to start planning for their retirement sooner rather than later.
28% of those Baby Boomers who do have retirement savings have less than $100,000 saved
(Source: Insured Retirement Institute)
This is a troubling statistic, as it means that a large portion of the population is at risk of being unable to support themselves in their golden years. There are a number of factors that may contribute to this problem.
For example, many people do not start saving for retirement until late in their careers, and by then, it can be difficult to catch up. Additionally, the cost of living has risen faster than wages in recent years, making it harder for people to save money. Finally, the stock market is unpredictable, and periods of low investment returns can make it difficult to build up a nest egg.
Whatever the reasons, it is clear that more needs to be done to help people save for retirement. Otherwise, we may see a growing number of elderly people struggling to make ends meet.
About half of all retirees plan to live off their Social Security benefits entirely
(Source: Insured Retirement Institute)
This is a daunting prospect, as the average Social Security benefit is quite low. However, there are a few ways to make the most of this limited income. One option is to downsize to a smaller home or apartment. This can free up extra money for other expenses, such as healthcare or leisure activities.
The average Social Security benefit was $1,555 per month in 2021
(Source: Social Security Administration)
This amount can vary depending on a number of factors, including the worker’s age, earnings history, and whether they are receiving benefits as a spouse or survivor. The average benefit is just one part of the Social Security program; there are also benefits for disabled workers and their dependents, as well as for survivors of deceased workers.
Only about 90% of retirees today will receive Social Security Benefits
(Source: Social Security Administration)
U.S. Social Security Administration is a social insurance program funded through payroll taxes. Workers and their employers contribute to the program, and benefits are paid out to retirees, disabled workers, and the survivors of deceased workers.
The program is primarily funded through payroll taxes, and it is estimated that these taxes will only be sufficient to cover about three-quarters of benefits in 2035. The rest of the funding for the Social Security Administration comes from general revenue tax revenue and interest on the trust fund’s investments.
Baby Boomers carry an average credit card balance of $6747 and $25,812 in other non mortgage debt (like personal loans and store cards), with a 3.2% delinquency rate for accounts 90-180 days past due
(Source: Experian)
The data does not explain why there is a high delinquency rate among Baby Boomers, but it could be due to a variety of factors such as job loss, medical bills, or simply poor financial management. Regardless of the reason, it is clear that many Baby Boomers are struggling to repay their debts.
A key reason behind a lack of retirement savings among Baby Boomers has to do with the stock market decline of the Great Recession
(Source: Social Security Administration)
For every 1 percent decline in the stock market, there is a $30,000 decrease in the median 401(k) balance. This is because many Baby Boomers rely heavily on their investment portfolios for retirement savings, and they were hit hard by the stock market crash of 2008. This crash wiped out trillions of dollars of wealth and left many people facing retirement with far less than they had planned for.
The Great Recession also had a significant impact on younger workers, who are now less likely to have access to employer-sponsored retirement plans. This means that they will need to save more on their own if they want to have a comfortable retirement.
55% of Baby Boomers will pay for their holiday purchases with credit cards, while 63% will use their savings
(Source: Finder.com)
As the holidays approach, many people are starting to think about how they will pay for their holiday purchases.
The survey also found that other popular methods of payment include personal loans (15%), home equity loans (9%), and lines of credit (8%). With so many options available, it can be difficult to decide which one is best for you.
If you’re considering using credit cards to pay for your holiday purchases, be sure to consider your interest rates and payment terms carefully. You may also want to consider using a rewards credit card to earn points or cash back on your holiday shopping.
Whatever method you choose, be sure to plan ahead so you don’t end up with more debt than you can handle.
16% of Baby Boomers bend the truth about their age to get a discount
(Source: Finder.com)
This is a troubling trend, as it indicates that many older adults are not feeling secure in their golden years. The stress of living on a fixed income can take a toll on one’s mental and physical health, and this research suggests that older adults are struggling to make ends meet. With the cost of living rising and Social Security benefits remaining stagnant, it is clear that our society needs to do more to support older adults in their senior years.
23% of Baby Boomers prefer to use a digital wallet to transfer and save money, as opposed to online banking, ATMs, and checks
(Source: Finder.com)
When it comes to financial planning, Baby Boomers are leading the way. According to a recent study, 23% of Baby Boomers prefer to use a digital wallet to transfer and save money, as opposed to online banking, ATMs, and checks.
This preference is likely due to the fact that digital wallets offer more security and convenience than traditional financial methods.
Additionally, Baby Boomers are more likely to have enough money saved up to make financial planning a priority. However, it’s worth noting that other generations are also beginning to adopt digital wallets. So, while Baby Boomers may be leading the way in financial technology, they’re not alone.
Final Thoughts: Baby Boomer Finances
As you can see, there are a lot of factors to consider when it comes to the finances of baby boomers.
The Baby Boomer generation is certainly a unique one – and while the typical Boomer household will certainly face challenges as Boomers age, particularly in regard to their retirement accounts, there are plenty of steps that can be taken to address these challenges.
Have you started planning for retirement yet? If not, and if you’re a Baby Boomer, be sure to meet with a financial advisor to get the best recommendations for how you can reach retirement age and enjoy that retirement in comfort!
