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10 Things You Didn’t Know About Baby Boomers
Tweet Share on Facebook January 15, 2009 Comment (9)The oldest baby boomers will turn 63 this year. Their AARP invitations have arrived and they’re starting to ponder retiring. Many boomers have already claimed their Social Security due. But that doesn’t mean this large generation will quietly fade into retirement, even if they can still afford to. Here’s a look at some interesting stats from the past year.
1. Gray Nation. All of the baby boomers will be age 65 or older by 2030. At this point nearly one in five U.S. residents is expected to be 65 and older, according to the Census Bureau.
[See Life After the Baby Boomers Retire]
2. Dollar signs. Baby boomers are the wealthiest generation in U.S. history. They have collectively earned $3.7 trillion, more than twice as much as the $1.6 trillion that members of the silent generation did at the same age, according to the McKinsey Global Institute. Too bad they didn’t save much of it, and much of what was saved was recently lost in the stock market.
[See 3 Reasons Baby Boomers Are the Richest Generation in History]
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Laid Off Workers: How to Find Health Insurance and Manage Your 401(k)
Tweet Share on Facebook January 13, 2009 Comment (1)Many Americans get health insurance and retirement benefits through their employer. But when you lose your job, as 524,000 Americans did last month, you lose your health and retirement benefits. And if you’re approaching retirement age, it can be particularly difficult to find affordable health care and keep your retirement plans on track.
Check out these tips for finding health insurance and managing your 401(k) if you are laid off.
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Most 401(k) Participants Have Very Small or Very Large Account Balances
Tweet Share on Facebook January 13, 2009 CommentAt the end of 2007, the average 401(k) account balance was $65,454 and the median (mid-point) account balance was $18,942. But these numbers obscure the fact that most 401(k) participants have either very small account balances under $10,000 or very large nest eggs over $100,000. Relatively few people have account balances between those two extremes. In fact, nearly three-quarters of 401(k) participants have account balances that are lower than $65,454 average account balance.
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Millionaires Lost 30 Percent of Their Fortunes
Tweet Share on Facebook January 12, 2009 Comment (1)If you were a millionaire last year, you may now only be worth $700,000. U.S. households worth $1 million or more have seen their assets decline 30 percent due to the financial crisis. Another 17 percent of millionaires have absorbed declines greater than 40 percent, according to an online poll of 750 households with over $1 million of net worth conducted in November by the Chicago-based wealth-research firm Spectrem Group.
“The current financial crisis has had a dramatic impact on America’s millionaires, reducing their net worth substantially and threatening their ability to maintain both lifestyles and retirement plans,” says Catherine McBreen, managing director of the Spectrem Group. “While they blame the government and Wall Street directly for the situation, many millionaires are not happy with their advisors’ performance and few say they will increase the work they give to advisors.”
Only 36 percent of the millionaires surveyed feel their financial advisor performed well during the crisis and just 14 percent say they will increase their use of financial advisors in the future.
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31 Companies That Have Cut or Changed Their 401(k) Match
Tweet Share on Facebook January 12, 2009 Comment (12)401(k) matchless? Join the club. At least 31 major companies have cut or changed their contribution to employee 401(k) accounts since the financial crisis began. Most went into effect on the first of this year. Workers at many of these companies must now fund retirement entirely on their own.
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Obama’s Mother-In-Law, Marian Robinson, Will Also Live in the White House
Tweet Share on Facebook January 9, 2009 Comment (23)President-elect Barack Obama’s mother-in-law, Marian Robinson, 71, will soon move into the White House - at least temporarily. During the presidential campaign, Robinson retired from her job as a bank executive secretary to help care for her granddaughters, Malia, 10, and Sasha, 7.
If Robinson stays, she will be part of a growing trend of retirees moving in with their children and grandchildren. More than 3.6 million parents lived with their adult children in 2007, according to Census Bureau data, up 67 percent from 2000. And 24 percent of baby boomers anticipate that their parents or in-laws will move in with them, according to the AARP.
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Baby Boomers Who Planned for Retirement Suffered Worse Losses
Tweet Share on Facebook January 9, 2009 Comment (2)Conventional wisdom holds that the retirement we will have is a function of how well we planned for it. But a new survey found that Americans who have done some planning for retirement reported worse losses, on average, than those who didn’t plan.
Many retirement planning strategies encourage workers to diversify beyond completely safe vehicles such as bonds and CDs. A Consumer Reports National Research Center poll of over 19,000 online subscribers between ages 55 and 75 on November 6, 2008 found that respondents who had planned for retirement were generally less conservative than those who didn’t. Before the financial crisis this strategy was beneficial, but it proved punishing during the current meltdown.
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3 Ways Baby Boomers and Seniors are Coping with the Recession
Tweet Share on Facebook January 8, 2009 Comment (77)It’s no surprise that Americans approaching retirement age are being hit especially hard by the recession. Middle age and older workers had the most money in the stock market to lose. A new AARP survey of 1097 people age 45 and older found that 79 percent of those with a 401(k), IRA, mutual fund, or individual stocks and bonds have lost money. Many older Americans are responding to their diminished nest eggs by becoming more frugal and adjusting their retirement plans. But some people have cracked into their nest eggs early and are putting off paying bills in a move that could only further hurt their retirement prospects. This is how baby boomers and seniors say they are coping with the recession.
Let’s just stay home. Thrift is quickly making a comeback as a desirable and necessary attribute in the United States. Many adults in the AARP survey reported difficulty paying for necessities such as food, gas, and medicine (52 percent), utilities like heating, cooling, or phone service (44 percent), and making mortgage or rent payments (25 percent). But they’re cutting back on entertainment (68 percent), eating out (64 percent), and postponing travel plans (52 percent). AARP offers these 15 tips to same money immediately, and estimates how much you can save from each one.
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Patty Duke, 62, Will Wait to Claim Social Security
Tweet Share on Facebook January 7, 2009 Comment (8)Yesterday I wrote about the new Patty Duke advertising campaign encouraging baby boomers to sign up for Social Security online. One ad depicts Patty Duke, in character as an older version of Cathy Lane from the 1960's sitcom The Patty Duke Show, sitting at her laptop and encouraging her cousin Patty Lane to sign up for Social Security online instead of going to the Brooklyn Heights Social Security office.
In real life, however, Duke, 62, has not yet signed up for Social Security. “For our ad campaign her characters from The Patty Duke Show, cousins Patty and Cathy Lane, are filing online for Social Security,” says Mark Hinkle, a spokesperson for the Social Security Administration. “Patty Duke herself has said she plans on waiting a few years.”
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McDonald’s Supersized 401(k) Match
Tweet Share on Facebook January 7, 2009 Comment (5)At a time when corporations are in the news every day for cutting their employee 401(k) matches, I was pleasantly surprised to read about a company making a significant contribution to employee retirement accounts. McDonald’s began offering employees a supersized 401(k) plan in 2004 in an effort to attract and retain talented workers.
Employees who save just 1 percent of pay get $3 from the company for every $1 stashed in their 401(k). The next 4 percent of pay contributed is matched by the company $1 for $1. There’s also a potential profit sharing match of up to 4 percent. And employees are immediately vested in their contributions and company matches. The Mc$ave money market fund for McDonald's employees is invested in the Prime Reserve Fund managed by T. Rowe Price.
