I am a member of the Baby Boomer generation (1946-1964), as I was born in 1958. Having spent a good deal of my youth recovering from a serious chemical dependency issue (successful) and then trying to find a career in the arts (not so much); I have reached the age of 48 without a robust retirement portfolio. I paid into an IRA for several years before I qualified for a 401(k) plan through my work. The best investment has been the 401(k) without any doubt. After ten years it has grown exponentially, doubling itself, then tripling itself. I now have, between my IRA and my 401(k) almost seventy-five grand saved.
This ain't much from the standpoint of my parent's generation, who all went into retirement with three quarters of a million in their bank accounts and could also count on social security to provide for them. The number crunchers in Washington realized that 75 million people would be entering the system roughly over a period of 20 years starting in 2008, when the first boomers turned 62. They realized that social security would have a difficult time meeting the demand. Thus George Bush's attempt to privatize or reform the program. His attempt failed, but at some point so will the program.
Although I have a rather modest nest-egg, I'm far better off than the vast majority of my 75 million fellows. The US Department of Labor states that the median (not the statistical average, but the numerical mid-point of the number range) for boomer households is $2,000 in retirement savings.
The average is $46,000, but that takes into account people who have tens of millions of dollars in savings. The super-rich bring the average up for everyone else. Even the Dept. of Labor acknowledges that there are wildly varying amounts in retirement accounts among households with similar incomes and expenses.
What does this mean, objectively, for me? (This is, after all, a me blog written by a member of the me generation.)
Retirment is going to be a beyatch. I think the answer may be a kind of communal living situation, investing in property with friends that we then share. I have a feeling that there are going to be a lot of Golden Girls arrangements in the future. I thinkthat we boomers have got to find a new template upon which to base our golden years--that the template our parents created will not work for us.
And even less so for generations to come. I predict that in a hundred years retirement as we know it will cease to exist; that the only individuals who will be able to retire before they are no longer physically able to work are those who work for the goverment. That can be avoided, of course, if present young people get smart and begin to save as soon as they can, even if it's just a handful of dollars a week.