Retirement Planning, Prospects are Readers’ Top Concerns

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The more the Great Recession recedes in the rearview mirror, the clearer is the damage sustained by the workers born in the final years of the baby boom.

These so-called late boomers were between 42- and 47-years-old when the recession hit. Their careers were just hitting their stride when they were slammed by the downturn. The 50 percent stock market plunge and spike in unemployment did particular damage to their 401(k)s and their retirement prospects generally.

A study totaling up the damage was the subject of one blog of particular interest to our readers last year.  

By the time they reached their early 50s, late boomers had accumulated only about $280,000 in retirement wealth in the form of 401(k) assets and future Social Security and pension benefits. The Great Recession hurt older boomers too, but at a less critical time in their work lives. When middle and early boomers were that same age, their comparable wealth was $332,000 and $346,000, respectively.

With late boomers and now Generation X fast approaching retirement age, financial planning was also on readers’ minds last year. One article provided a clue to what’s behind that: more people are saving for retirement but they’re still not saving enough.

No wonder Social Security’s financial shortfall is such a concern. Another popular article attempted to correct the inaccurate belief that Social Security will stop paying benefits entirely when the trust fund surplus depletes in a few years. If Congress doesn’t address the shortfall caused by the flood of retiring boomers, benefits would have to be cut somewhat – but not eliminated.

Readers were also interested in a blog explaining to married couples that they would build up more savings if they max out the more generous of their two employers’ 401(k) matching contributions. “These couples could increase their retirement wealth without [reducing] their consumption by simply reallocating” their contributions, the researchers said.

With retirement on the horizon, workers are also seeking reliable information about Medicare. The program is especially valuable to middle class retirees, who receive $230,000 to $260,000 more in Medicare and Medicaid benefits during their retirement years than the total amount they paid in as workers, according to one study.

Other articles peered under the hood of Medicare Advantage insurance policies, which have overtaken Medigap plans in market share. One article described the barrage of sometimes misleading advertisements by the brokers and insurers selling the policies. Another reported that the plans deny about 6 percent of medical treatments requested by physicians but most are approved upon appeal.

When workers retire, they confront many unfamiliar issues all at once. They want information about what they can expect. 

Many of the studies reported herein were derived in whole or in part from research activities performed pursuant to a grant from the U.S. Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium.  The opinions and conclusions expressed are solely those of the authors and do not represent the opinions or policy of SSA, any agency of the federal government, or Boston College.  Neither the United States Government nor any agency thereof, nor any of their employees, make any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report.  Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.

1 comment
Wendy Weiss

Thank you for calling attention to the apprehension of retirees. So many responsibly saved for their retirement. The rise in the markets from 2009-2021 prompted many of us to retire. Then the 2022 crash in the Bond and Stock markets alarmed us (much like the financial crisis did before that). How can they recover? Develop resilience in retirement.

Work with a professional, so you and your partner can start thinking along different lines. She can help you recognize that you have more resources than you thought. Each resource gives you options you had not considered. The important thing is to figure out which will be most beneficial for you and your partner to rely on. A professional—someone with experience advising on these challenges— can advance your ability to figure out which resources will give you the greatest benefits. And she can help you develop a customized strategy to increase your financial security over the long term.

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