Two thirds of U.S. middle-income baby boomers expect they will have a more difficult time in retirement than their parents, according to a recent study.
Sixty percent of baby boomers also said they were most envious of the guaranteed income their parents enjoy from their pensions-something that has become a luxury in today's workplace.
"The retirement of the Baby Boom generation will not only test the limits of government programs such as Medicare and Social Security, but also help shape the definition of retirement itself," said Scott Perry, president of Bankers Life and Casualty Company, whose Center for a Secure Retirement released the study.
The study, called "Middle-Income Boomers, Financial Security and the New Retirement," focused on 500 middle-income U.S. citizens between the ages of 47 and 65, with annual income between $25,000 and $75,000.
The study also noted that the concepts of being taken care of by family members, slowing down or moving into a retirement community-activities commonly associated with the retirement of previous generations-are being replaced by baby boomers now wanting to keep up with technology and trying to stay physically fit.
Nearly a third of respondents said they anticipate having to financially support at least one adult person during retirement and 15% expect that person will be an adult child or children, rather than an elderly parent.
Retirement risk has been shifted from employers and the government to individuals, with the demise of corporate pension plans in favor of 401(k) plans and other defined-contribution plans, the discontinuation of many employer-paid retiree health benefits and the unsettled future of Social Security and Medicare.
Today, just over half of middle-income boomers work for an employer that offers a retirement savings plan-less than the national average for all workers (72%). Of those who contribute to a retirement plan at work, 24% do not receive a match from their employer.
One in seven respondents said they have no pension or retirement accounts at all and 55% of middle-income boomers have saved less than $100,000.
Baby boomers "may have to take more personal responsibility for their retirement financial security than was the case of their parents' generation and plan for the risks that may jeopardize this security, like long-term care, inflation and outliving their money," Perry said.
-Jim McConville