what baby boomer retirement is looking like
every baby boomer will be 65 or older by 2030 their retirement experience will be very different from that of their parents the greatest generation in many ways 2increasing life expectancy has made it likely that baby boomers will spend more time in retirement than their parents did the average life expectancy was 77 5 years as of 2022 in the u s 1 1 years more than in 2021 7greater longevity coupled with good health and an accommodating job market also opens up the possibility for baby boomers to remain in the workforce longer doing so won t just provide them with more current income and more time to plump up their retirement accounts it will also reduce the time that they ll have to depend on their savings to support them baby boomers witnessed the decline of traditional defined benefit pensions during their working years where the employer promised workers a certain amount of regular income upon retirement the employer was responsible for funding the pension plan as well as choosing and managing its investments many of the baby boomers parents had retired comfortably on such pensions defined contribution plans such as 401 k plans came along in their place they re largely funded by the employees themselves from their paychecks often with some form of matching contribution from the employer employees are typically given a choice of investments such as an assortment of mutual funds making it their responsibility to contribute enough money and invest it wisely it was a boomer s tough luck if they failed to do so in 1975 27 2 million private sector workers participated in defined benefit pension plans that number dropped to 12 6 million by 2019 the number of defined contribution plan participants rose from 11 2 million to 85 5 million over that same period 8among baby boomer households with retirement savings the transamerica center for retirement studies estimates their median value at 289 000 the center also reports that 41 of boomers expect their primary source of retirement income will be social security benefits 9the money to pay social security retirement benefits comes from two sources a social security trust fund known as the old age and survivors insurance or oasi trust fund and out of the income that s paid into the system by current workers social security s trustees estimate that the trust fund will run out of money in 2033 the income from current workers will be able to cover only 77 of current retirement benefits at that time 10part of the problem is the size of the baby boom retiree cohort versus the number of current workers there were 8 6 active workers for every retiree in 1955 11 that number dropped to 2 7 workers per retiree in 2023 according to social security administration estimates and it may be down to 2 3 by 2035 12who named the baby boom the term baby boom goes back to the years immediately following world war i when england experienced one it began to appear in u s newspapers toward the end of world war ii and may have been given greater currency when widely read financial columnist sylvia porter used it in a 1951 article on the boom s economic impact 13the term baby boomer is more recent dating back to at least the 1970s it got a boost in 1980 when author landon y jones published his bestselling book great expectations america the baby boom generation and it has remained with us ever since 