The Baby Boomer generation is reaching retirement age in record numbers. With more Boomers retiring on a daily basis, it helps to understand how prepared they are to leave their jobs for good. In this article, we’ll discuss the average retirement savings for Baby Boomers, and provide tips for how to boost retirement income.
Regardless of which generation you belong to, a financial advisor can help you get ready for retirement.
Average Retirement Savings for Baby Boomers
According to the Transamerica Center for Retirement Studies, the estimated median retirement savings for Baby Boomer is $202,000. Based on the 4% Rule, this would yield an annual retirement income of $8,000 per year. Depending on your perspective, this portfolio size could be more or less than you expected. Transamerica also found that about 45% of Baby Boomers have saved $250,000 or more. Further, 40% of Boomers agree with the statement that they have not done enough to save for retirement.
A study by the Stanford Center on Longevity found that people born from 1948 to 1953 had a median balance in tax-advantaged plans of $290,000, while those born from 1954 to 1959 had a median balance of $209,246 in their tax-advantaged plans.
One item that puts this in perspective is that the Boomer generation was the last to have widespread access to workplace pensions. With expected retirement income from pensions, many Boomers didn’t feel the need to save as much as succeeding generations.
Additionally, for Boomers who are still working, this number should continue to rise as they make additional annual contributions, and their investments grow. If you use the Rule of 72, the youngest Boomers could expect to have one last “doubling” of their retirement nest egg with average returns of 8% to 10% before they reach 67. Click HERE to learn more.