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The Future for Boomers
FIGHT BACK! BY DAVID HOROWITZ
The Future for Boomers
As baby boomers approach 50, they're beginning to real- ize that retirement is not that far way. But, according to a Princeton University/Merrill Lynch study, boomers as a group are
saving only about a third of the money they will need to maintain their standard of living after th
quit working.
Part of the reason is that the boomer generation grew up in an age of rising expectations. here was a general as- sumption that incomes would go up and up, there would be time later to
save and, whatever else happened, there would always be Social Security there to fall back on.
Meanwhile, there were the needs of growing families to be met -- homes of their own, college
funds for the kids and the trappings of the good life.
Now, reality is setting in. The median annual income for retirees living on Social Securitytoday is only $10,200. Even those with retirement plans are finding that living on a fixed income s difficult as prices go up and income does not. In addition, the cost of health care continues to
rise, and there is no guarantee that national health care reform will solve that problem by the
time the boomer generation is ready to retire.
Another factor is that Boomers generally are not very sophisticated investors. Many have
put all their retirement savings in conservative investments like money market funds and
government bonds where returns have been consistently lower than stock funds. Others have
gone to the other ex- treme, risking their retirement savings in high-flying ven- tures that can go ust at any time. At the far end are vic- tims of fraudulent investment schemes in oil and gas
specu- lation, rare gems and coins, and similar scams.
Experts say that if boomers knew how to diversify their investments for maximum safety and eturn and had the discipline to save regularly, they would have the money they need to keep up
their lifestyles in retirement. It's not that they have to become financial experts themselves, butthey should at least take the time to understand their own in- vestments and seek out guidance
from reliable financial advisors.
An important part of the process is to plan ahead. Very few people actually know what theirannual income will be at retirement age. They have a company retirement plan, but it may have
been years since they reviewed that plan to see how much money is actually going into it each
month, how much is there right now, how much there will be 10 or 15 years from now and what
that means in terms of monthly income. If it's not enough, then there is still time to increase the
payroll deduction and add to their retirement fund.
The outlook for boomers is not all bad. According to the Congressional Budget Office, they re better educated, enjoy a higher average income and have more accumulated wealth than
their parents. With more women entering the work force, there are more two-income families with
both husband and wife putting money away for their retirement. Insurance companies also report
record sales of retirement annuities.
The good news is that there is still time to plan for retirement. But for the boomer
generation, time is running out, and every year that goes by makes it more difficult and more
expensive to build an adequate retirement fund.
If you have any questions or comments, please write to David Horowitz in the Consumer
Forum+ (go FIGHTBACK). COPYRIGHT 1994 CREATORS SYNDICATE, INC.
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