21% of Boomers Lack Savings for One Month’s Expenses
Yet another poll reveals that all generations feel unprepared when it comes to retirement savings — with 21% of baby boomers lacking adequate savings to cover one month of basic expenses, according to AARP.
Co-commissioned with the Association of Young Americans, the “Three Generations Survey” asked baby boomers,Generation Xers, and millennials, a variety of retirement and financial security-related questions. Conducted in July and August, the poll surveyed 4,862 adults, of which 1,684 were baby boomers.
The age groups were consistently unsettled about their financial security in retirement, with about 40% of boomers worrying they would not be financially comfortable once they stopped working.
For boomers who felt slightly more financially prepared, 43% said they felt confident they could cover six months of expenses with only their available cash or savings to live on. The survey defined basic expenses as “housing, food, child care, health care, and other bills.”
Student loans made up a big chunk of the debt that thwarted all three generations’ savings efforts.
“These loans have delayed or prevented members of every generation from achieving major life milestones such as saving for retirement, buying a car or house, or moving from their current residence,” according to a statement from AARP.
Among baby boomers surveyed, more than 50% reported school-related debt in excess of $30,000. While millennials reported an average of $41,000 in student loan debt, baby boomers were not far behind with an average of $38,000.
The survey also looked at Social Security. While 78% of all respondents felt that funds from the program were an important source of income in retirement, 90% of baby boomers saw Social Security as an integral part of their retirement financial security.
According to the Social Security Administration, nine out of ten retirees aged 65 and older receive Social Security benefits. With an average monthly payment of $1,413, about $61 billion will be given out to about 43.1 million retired Americans in 2018.
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