The millions of baby boomers planning to retire over the next two decades face an increasingly uncertain future. Traditional pensions are disappearing, Social Security has been scaled back, and men's earnings have stagnated. Yet, there's also been some encouraging news, including health improvements and women's increased earnings. Our latest research sorts out these conflicting trends to show what's in store for retiring boomers and how social, economic, and demographic changes are reshaping retirement incomes.
Boomers' Retirement Income Prospects Our new projections show that between 30 and 40 percent of boomers will not have enough income at age 70 to replace three-quarters of their preretirement earnings, a common standard for measuring retirement income adequacy.
How Will Retired Divorced Women Do? Among the most vulnerable retirees today, divorced older women will likely fare much better when the boomers retire. Women's increasing lifetime earnings will raise future retirement incomes for divorced women and reduce their poverty rates. However, African American and Hispanic divorcees will lag behind their non-Hispanic white counterparts.
Are Financial Planners Advising Us to Save Too Much for Retirement? Conventional wisdom recommends saving enough to replace 80 percent of preretirement pretax income. However, this simple rule of thumb may be inappropriate for the many workers who delay saving for retirement, because it would force them to spend much less near the end of their careers than in retirement.