The average retirement balance of all workers is $77,000. The median is much lower, as the highly paid employees have large balances. This is pitiful enough, but looking at the balances for 55 to 64 year olds is frightening. The chart below captures a future of cat food and Oodles of Noodles for millions of Boomers. No wonder they will never vote to reduce entitlements. There really is no excuse for this pitiful level of savings at their age. A 60 year old was born in 1953. They turned 27 years old in 1980 at the outset of a 20 year bull market. Anyone who contributed regularly to a 401k from 1980 until today should have hundreds of thousands accumulated. Instead you have 60% of all 55 to 64 year olds with less than $72,000 of retirement savings.
These people have a life expectancy of 20 years and many will only get $15,000 to $20,000 per year from Social Security, with increases that will be less than the true inflation rate. Meanwhile, their real estate taxes, food costs, energy costs, and health care costs go up by 5% per year or more. They can earn about $600 of interest per year on a $120,000 retirement account balance. They can’t expect more than 3% real annual stock market gains over the next ten years, with a couple of plunges mixed in for good measure.
I hope Boomers weren’t counting on the idyllic retirement they see on those Wall Street banker commercials. The only ones having an idyllic retirement are the bankers.
MY CAT SEEMS TO LIKE IT. MAYBE BOOMERS WILL LIKE IT TOO