‘Peak Boomers’ Retiring Without Pensions to Hit Economy, Social Security

Baby boomers are preparing to retire.
Alistair Berg/Getty Images

  • More than 30 million “boomers” are entering retirement without financial preparation.
  • The economy could take a hit, with sectors like manufacturing and education having to replace baby boomer workers.
  • These new retirees will likely rely disproportionately on Social Security to stay afloat.

The youngest baby boomers are on the verge of retirement – ​​and most of them are not financially prepared for this next stage of their lives.

Starting this year, more than 30 million baby boomers born between 1959 and 1964 will begin to turn 65, marking the “largest and final cohort” of this generation entering retirement, according to a new report from the Retirement Income Institute of the Alliance for Lifetime Income.

Many members of this cohort, known as “peak boomers,” are facing significant economic hardship, according to the report. It’s what some have called the baby boomer retirement bomb — and it could be costly for the rest of the economy’s workers.

Through an analysis of data from the Federal Reserve and the University of Michigan Health and Retirement Study, the report found that 52.5% of baby boomers have $250,000 or less in assets , meaning they will likely deplete their savings and rely primarily on Social Security income in retirement. Another 14.6% of this cohort have $500,000 or less in assets, meaning “nearly two-thirds will struggle to meet their retirement needs,” the report says.

“America has never seen so many people reach retirement age in a short period of time, and well over half of them will struggle to meet their needs during retirement, let alone maintain their current standard of living,” Robert Shapiro, author of the report and the former undersecretary of Commerce for Economic Affairs, said in a statement. “They don’t have the protected income that many older baby boomers have with a strong pension or higher savings.”

The wave of baby boomer retirements could also have an impact on the U.S. economy as a whole. The report projects that employers will need to replace up to 14.8 million baby boomers – primarily in manufacturing, healthcare and education – which could decrease economic productivity.

Additionally, the retirement of this generation is expected to have an impact on consumer spending. Using data from the Consumer Spending Survey, the report finds that baby boomers will spend $204 billion less in 2032 than in 2022, with the transportation sector being hit the hardest.

Still, as the report points out, younger employees will likely fill some of the jobs that baby boomers leave, and productivity will increase as technology advances.

The crisis is partly due to changes in the way Americans save for retirement

Peak boomers entered the workforce just as pension plans were moving away from defined benefit plans like pensions – which typically guarantee a stable income and are employer subsidized – in favor of contribution plans like 401(k)s, which rely on workers to contribute.

Of the different types of retirement savings plans examined by the report, defined benefit pensions have the fewest disparities across race, gender and ethnicity (although there are significant disparities in payouts annual) – but only 24% of baby boomers benefit from them, and even these plans face potential underfunding.

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Many Americans of retirement age already live on paltry incomes. Just over half of Americans over 65 live on an annual income of $30,000 or less, according to the Census Bureau’s Current Population Survey, with the largest share living on $10,000 to $19,000. And, according to Business Insider’s calculations using CPS ASEC data, 79.2% of retirees receive some type of Social Security income.

Retirement-age Americans, many of whom fall into the baby boomer category, have already told Business Insider that perhaps they should just keep working until they die or until they become crippled to stay afloat.

“Only the very rich will have some dignity in their old age,” said Pam, who is almost 58. “And the rest of us are just going to pray that they can die while they still have a job because no one wants to die in the streets.”

Are you a baby boomer and not prepared for retirement? Contact these journalists at And

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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe. Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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