As the greatest surge of Americans in U.S. history begins to turn 65 this year, 52.5% have assets of $250,000 or less, according to a new study released by the Alliance for Lifetime Income's Retirement Income Institute.

Based on their assets and their likelihood of living 20 or more years in retirement, two-thirds of "peak boomers"—the 30.4 million Americans set to retire between 2024 and 2030—will be challenged to maintain their lifestyles in retirement, study author Robert J. Shapiro, former undersecretary of commerce for economic affairs under President Bill Clinton, said during a conference at the Press Club in Washington, D.C., today to release his findings.

Peak boomers are the youngest, largest and final cohort of baby boomers to retire and the impact of their retirements will have a far-reaching impact, not only on entitlement programs and retirement policy, but on the U.S. economy, Shapiro said.

“America has never seen so many people reaching retirement age over a short period, and well over half of them will find it challenging to meet their needs through their retirements, let alone maintain their current standard of living,” he said.

While 52.5% of them have assets of $250,000 or less, “another 14.6% have assets of $500,000 or less, so nearly two-thirds will strain to meet their needs in retirement,” the study found.

Peak boomers “lack the protected income that many older boomers have from solid pensions or higher savings,” he noted.

Shapiro said one the most jarring findings of the study is the stark differences in retirement savings based on gender, race and ethnicity and especially education, which was the biggest determinant of retirement assets.

While the median retirement savings for all peak boomers is $225,000, it is $269,000 for men versus $185,000 for women, $299,000 for whites versus $123,000 for Hispanics and $49,000 for Blacks. The median is $591,000 for college graduates versus $75,000 for high school graduates and $7,000 for those without high school diplomas.

For the 24% of peak boomers with defined-benefit plans, the demographic disparities are much more modest. Using pension-like features such as auto-enrollment, auto-escalation and even auto-annuitization, defined contribution plans will start to ease demographic disparities going forward, Shapiro argued.

“The saving grace for some peak boomers is that they can count on the added protected income that a pension provides in retirement,” said Jason Fichtner, executive director of the ALI Retirement Income Institute and chief economist at the Bipartisan Policy Center. “However, since only 4% of all private sectors workers had protected income from a pension as recently as 2020, this economic study of peak boomers should be a cautionary tale to all Americans planning for retirement.”

What is clear is that “with 10% of workers exiting the workforce between 2024 and 2030, it will depress U.S. GDP and consumer spending, causing double digit turnover in key economic sectors and increasing business costs,” the study found.

Peak boomer retirement will mean many millions of job vacancies and slower productivity gains as well as added burdens on entitlement programs such as Social Security, Shapiro said.

“Employers will have to replace between 10.8 million and 14.8 million peak boomer employees in manufacturing, construction, healthcare, education and professional services. This unprecedented drain of experienced workers will directly dampen productivity by 0.9% to 1.3%,” the study found.

Despite younger generations filling the positions vacated by peak boomers, which will partially offset these effects, the direct impact of their retirements will reduce GDP growth by 7.3% by 2030, the study found.

The retirement of peak boomers will also dampen consumer spending some 15.3%, hitting the transportation sector the hardest, the study found. The utilities, wholesale trade, and real estate sectors will also see falling revenues.

“As peak boomers draw on Social Security and Medicare, their benefits will add $347 billion to entitlement spending by 2030, although the projected mortality of boomers will offset 61% of Social Security’s additional costs and 58% of the additional costs for Medicare,” the study said.

The study was prepared by the Alliance for Lifetime Income, which was founded in 2018 by a group of insurance companies, asset managers and public policy think tanks.