High personal debt could endanger the standard of future retirees, a new report warns.
This warning comes as retiring Baby Boomers confront greater financial retirement challenges than their parents and grandparents did when they left the workforce in a study from the Stanford Center on Longevity.
The tottering retirement security for many Boomers has profound implications for the overall well-being of individuals, families, and society today and for generations cautioned the authors.
They added the worsening financial preparation could plague the nation for decades as Millennials and Generation Xers lag behind their savings goals more than older generations.
The report noted Millennials and genXers areonly saving 7 to 10 percent of income toward retirement, down from the 9 to 10 percent of Boomers.
The trend by younger Americans to eschew homeownership in greater numbers than their parents and grandparents did leaves them out of an opportunity to increase wealth which could hurt their financial security down the road, the study warned.
On average, mid-boomers between 55 and 60 have saved less than the moms and dads and grandmas and grandpas,
The problem is exacerbated because the Boomers have to stretch that money years longer.
“People can realistically expect to enjoy 100 year lives,” the Stanford think tank predicted.
The smaller nest eggs show up in a variety of places: home equity, total household wealth and retirement savings.
With the shrunken savings, Boomers have to contend with higher debt.
About two-thirds of Baby Boomers had debt in 2014, compared to only 20 percent born before 1930 and 40 percent of those born between 1931 and 1941, according to the authors.
For mid-Boomers who owed, average debt in 2014 was $120,000.
“Given the current level of assets and debt among boomers, it’s highly likely that they will either need to reduce their spending in retirement, work into their late 60s and 70s, or do some combination of the two,” the study forecasted.
To see the full study, click on https://stanford.io/2ScKb9t
