Why Do Late Boomers Have So Little Retirement Wealth?
The brief’s key findings are:
- With the gradual shift from defined benefit plans to 401(k)s, younger age cohorts would be expected to have more retirement wealth in 401(k)s.
- However, data for the Late Boomers at ages 51-56 show a surprising drop in 401(k)/IRA assets compared to earlier cohorts at the same ages.
- Late Boomers were particularly hard hit by the Great Recession, with a significant share remaining out of the labor force even as the economy recovered.
- But even those who were working had lower earnings, less 401(k) participation, and flat 401(k) balances.
- Why Late Boomers were hit so hard, why they have struggled since, and the fate of future cohorts remain open questions.