Retirement Planning

Baby Boomers and Retirement Saving: Where Do You Stand?

The Baby Boom generation has made its mark on American like perhaps no other generation in history. Its sheer size dwarfed the size of both previous and subsequent generations, and its members remain in positions of political power today. But obviously not all boomers are alike, and that’s particularly the case when it comes to retirement saving.

While many boomers are in sound financial shape, ready to enjoy retirement, or already enjoying their retirement, many more are struggling to make ends meet. If you’re a baby boomer, how do your investments compare to those of your peers?

What Characterizes Baby Boomers?

Baby boomers are defined first and foremost by their age. The post-World War II baby boom lasted roughly from 1946 to 1964, the result of millions of soldiers coming home, settling down, and starting families.

But perhaps the defining characteristic of the baby boomers is the era in which they grew up. Baby boomers had the good fortune to work, save, and invest during what is probably the best stock market bull market this country has ever seen, the 1982-2000 bull market.

From its low in August 1982, the Dow Jones Industrial Average rose from under 800 points to over 11,700 points by January 2000, meaning average annualized gains of 17%. That’s such phenomenal growth that you would have had to almost try to lose money during that kind of market.

The oldest baby boomers were in their mid-30s when the boom started, about the time their earnings would have begun to peak, and were in their mid-50s when the dotcom bubble burst. Younger boomers would have been around 18 when the boom started, and in their mid-30s when it ended. That gave millions of baby boomers the ability to rack up significant sums of retirement savings.

Where Do Baby Boomers Stand Now?

With those opportunities to rack up significant retirement savings, you would think that most baby boomers would be sitting pretty right now, but that’s not really the case. On average, baby boomers have $152,000 saved up for retirement. That may sound like a decent amount of money, until you realize that the average boomer spends nearly $50,000 a year. Even if they were to cut their spending in half, the average baby boomer would only have enough money to last for six years after retirement.

What’s even more worrying is that 45% of baby boomers don’t have any retirement savings at all. Of the 55% who do have retirement savings, 28% have less than $100,000 saved and an additional 23% have less than $250,000 saved. Only 20% of baby boomers with retirement savings have $500,000 or more saved for retirement.

With the youngest baby boomers now reaching their late-50s, the baby boomers will be mostly all retired within the next decade. So the lack of retirement savings of that generation is very worrisome.

While many may undoubtedly expect to be able to live on their Social Security benefits, the Social Security trust fund is expected to run out by the mid-2030s, at which point retirees can only expect to get about 80% of their expected benefits. With the average 65-year-old living another 15-20 years, that doesn’t bode well for most baby boomers.

With average annual spending of nearly $50,000, the average baby boomer really needs to have $750,000 or more saved up to be able to live comfortably in retirement. If you don’t have that much saved up, does that mean you’re doomed to a lower standard of living in retirement?

Don’t Give Up Hope

If you haven’t saved up these kinds of sums, don’t get discouraged. The desire to keep up with the Joneses is one of the major causes of discontent in our society today, and it can drive many people to spend more than they really need or want to. The first thing you’ll want to do when assessing your preparedness for retirement is to figure out how much you expect to spend each year. Then you can try to determine how much money you need to sustain yourself in retirement.

If you’re over age 50, you can add extra “catch-up” contributions to your 401(k) and IRA plans, allowing you to save up even more money in tax-advantaged retirement accounts. And when it comes to investing in 401(k) and IRA accounts, don’t forget that you have many more options than just what your plan allows.

Diversify Your Retirement Assets

Many investors may not be aware that they can roll over assets from a 401(k) account into an IRA account, or transfer assets from an existing IRA account into another IRA account. In most cases, those rollovers or transfers occur without tax consequences.

That allows you to invest in alternative assets such as gold and silver, using their existing retirement assets to purchase physical gold and silver coins and bars through a gold IRA or silver IRA that maintains all the same tax advantages as your existing retirement accounts.

With the 1982-2000 stock market boom long since over, the past two decades haven’t seen nearly the growth that the 1980s and 1990s did. While stock markets have nearly tripled from their 2000 highs, the growth of gold and silver have been far greater, with gold growing nearly sevenfold and silver nearly sixfold.

The outlook for the coming years and in fact for the next decade doesn’t look too rosy for stocks, with a high likelihood of another major stock market crash and a lackluster recovery after that. With an exploding national debt and the potential for higher inflation, many analysts see the coming decade as a possible “lost decade” that will offer fewer opportunities for investment growth. And with gold and silver’s history of making gains when stock markets are faltering, they could be one of the best opportunities to continue growing your retirement savings in the coming years.

If you’re looking to retire in the next decade, do you want to risk that your retirement savings will lose money in a major crash? Or do you want to protect your retirement savings by investing in gold and silver, whose track record during weak economic times marks them as an important wealth protector and safe haven?

By contacting the experts at Goldco, you can learn more about how gold and silver can help safeguard your retirement savings. Don’t wait any longer to get started. Call Goldco today and start taking the crucial steps you need to protect your retirement savings and ensure a sound financial future for yourself and your family.

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