With her wavy long hair, bell-bottom jeans and a peace sign hanging from her neck, Rita Beck was much like other boomer women who came of age in the trippy, turbulent 1960s and 1970s. They attended college in record numbers, seized job opportunities their mothers never had and reveled in their independence.
“Our parents scrimped for everything,” says Beck, 58, of Janesville, Wis. “We boomers came on the scene and said, ‘Who needs to save for a house when you can finance it 100 percent?’ It became too easy for us to have the good life. We were raised as a privileged group.”
Over the last 25 years or more, boomers like Beck dominated the U.S. economy. They earned more and spent more than previous generations of workers, yet they haven’t saved nearly enough. Now as they approach their retirement years, they’re feeling more pressure and pessimism about their financial future than other age groups.
According to a poll of 3,500 adults, those ages 40 to 64 felt the highest levels of financial angst. People ages 50 to 64 were downright downbeat – they were more likely than any other demographic to agree with the statement: “Even if I made all the right choices in life, I could not get ahead because the economy does not work for people like me.” They also were more likely to say, “The harder I work, the more I fall behind.”
The poll, released in January, was sponsored by AARP and commissioned by A Woman’s Nation and the Center for American Progress in connection with their project, The Shriver Report: A Woman’s Nation Pushes Back from the Brink.
The findings are not surprising, says Alicia Munnell, director of the Center for Retirement Research at Boston College. “We know that, if you look at people ages 55 to 64 approaching retirement, and you look at 401(k) and IRA balances together, they have only $120,000 [on average]. That’s just a minuscule amount of monthly income” to draw down in retirement, she says. “People will be shocked at how little money they have.”
To many older workers, saving adequately for retirement seems as daunting as walking a tightrope in stilettos. Many are supporting their adult children, or helping their elderly parents, with the money that would typically go toward retirement savings. Some even withdrew money from their retirement accounts to pay for their children’s college tuition or just to get by.
Women nearing retirement felt particularly squeezed and less financially secure, the survey found, perhaps because they’re more likely than men to go in and out of the workforce to cope with elderly relatives and other family pressures.
“The good news for baby boomers is that their parents are living longer than previous generations and they’ve had more control in building their families and careers,” says Nancy LeaMond, executive vice president of AARP’s State and National Group. “The challenge is that this new reality for American families, especially when combined with economic uncertainty, has changed the math for retirement security and caught many unprepared to handle the pressures coming at them from all angles.”
Indeed, nearly one in five people ages 50 to 64 have children over age 18 living at home, the survey found; one in three provide financial support for their adult children.
Kevin Hosid, 50, a database administrator, says he’s feeling stretched after paying for his children’s education – one daughter is in college and his younger daughter is in a magnet school in Dallas. In order for her to attend, he had to establish residency. So he purchased a condo in Dallas. Now he pays two mortgages, including the one on his primary home in nearby Plano, Tex.
“I’m worried if something happens, do I have enough saved? I don’t feel I’m where I should be. And now time is running out to rebuild” retirement savings, Hosid says. “I wished I had kids earlier so that I wasn’t in my 50s when they were in school, and I wish I had learned how to invest better.”
Hosid isn’t the only one harboring regrets. Among the people polled, as many as three in four between the ages of 50 and 58 say they regret some of the financial decisions they’ve made in their lives. Two in three say they would have avoided debt. About two in five would’ve chosen a different profession or stayed married if they could turn the clock back.
Nearly one in three in that age group would have delayed marriage or put off having children, the poll found.
Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University, says boomers face an uncertain future because of all the financial obligations on their plate in the years leading up to retirement. “They don’t know whether they’ll have the standard of living they’d like to have” when they exit the workforce, he says, “or whether they’ll run out of money.”
The deep recession and tepid recovery only added to their woes. More than 3 million older adults lost their homes to foreclosure or held mortgages that were worth more than their property’s value, according to AARP’s latest research, obliterating a huge chunk of their retirement nest egg.
David Rasberry, 55, of Birmingham, Ala., lost his home and his job. “I’m the American sob story,” he says.
Rasberry worked in commercial printing plants for 15 years. He earned around $64,000 before he was laid off last year. He found another job recently. It pays $36,000 a year.
“I have no retirement funds,” he says. “I had a 401(k) that I had to break into to try to save my home, which was unsuccessful.”
Rita Beck can relate. She and her 63-year-old husband also lost a home in a short sale. It was a dreadful financial setback at a time when the two of them were just a stone’s throw from retirement.
“The average person our age should have at least a couple of hundred thousand saved for retirement,” she says, “and we’re not even at $100,000.”
Photo: Marshall Astor/flickr
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