Although the United States has made its recovery from the crippling recession, the benefits continue to remain unequally distributed. Almost two-thirds of the baby boomer generation believe they have not prospered at all. These findings by Bankers Life Center for a Secure Retirement also shows that more than 50 percent of this generation has found that their savings at present are actually lower than what was prior to the financial crisis.
Managing their lives
The report by Bankers Life also points out that the baby boomer generation are taking a number of steps to manage spending and increase the investment portfolio. The important question is whether the action they are taking is sufficient.
The study by Bankers Life found that the inflation adjusted average American household income went down by nearly seven percent during the 2007 to 2010 period. Average net worth of the middle income households dropped 39 percent in the 2007 to 2010 period. Most tellingly homeowners hemorhage a median of 55 percent when it came to value of their homes during the 2007 to 2010 period. The last fact is a crippling loss as a majority of middle income Americans have put in their money in home equity and less in financial assets.
Equipping for the future
Since it is estimated that boomers will live for about 30 years' more, it is a foregone conclusion that they will suffer another financial crisis. It is natural that they are prepared for such an eventuality. It is a good thing that they are taking a number of steps to better their financial position, like managing their spending and reviewing the investments they make. Some baby boomers have resigned themselves to work part-time post retirement. Many are intent on accumulating an emergency fund. Many save a bigger percentage of their paychecks compared to pre-crisis levels. This does not mean that everyone of the baby boomers are saving money. The fact is that one in four no longer makes any kind of investments.
Nearly 40 percent of baby boomers expect that Social Security will be the mainstay of their post retirement income. This percentage is greater than what was prior to Great Recession, when only one among three felt that way. These boomers could face disappointment as the Social Security was not designed as a retirement income source but as a kind of safety net. A baby boomer who expects to rely on the largesse of Social Security should start to receive the benefits from 70 years of age.