To download this study (with great info), click on the following link:
https://advisorshare.com/peak-boomers-impact-study
This week I read from a few publications about a retirement planning study on baby boomers. After 20 minutes of surfing the web, I finally found the actual study. I don’t understand why publications don’t include a link to download the actual study. The link is above so you don’t have to look for it.
Guaranteed income products—if you are an advisor who likes to use guaranteed income for life products, this will be a study you want to download. The lack of guaranteed income sources for baby boomers who are retiring is highlighted in the study.
OnPointe Retirement Planner
To learn about the industry’s most powerful software to show the value of an FIA with guaranteed income benefit (GIB) rider, click on the following to check out our newly-released OnPointe Retirement Planning software. OnPointe is the only software that can run a GIB rider product with account values to show the benefit of an FIA with GIB rider. And our charts are very powerful.
To learn about powerful software, click on the following:
https://onpointesoftware.com/retirement-planner-software
Table of Contents
The Peak Boomers Impact Study
I. Introduction and Summary of Findings ………………………………………………………6
II. Who Are the Peak Boomers?……………………………………………………………………11
III. The Peak Boomers’ Financial Assets as They Prepare to Retire…………………….14
IV. Peak Boomers’ Retirement Benefits from Social Security…………………………….20
V. Personal Annuities as a Retirement Resource for Peak Boomers……………………27
VI. Supplementary Security Income for Low-Income Retired Peak Boomers ………30
VII. Home Equity as an Additional Resource for Peak Boomers’ Retirements ……..33
VIII. Market Volatility and the Future Value of Peak Boomers’ Financial Assets …..36
IX. Other Potential Financial Issues for Retired Peak Boomers…………………………..41
X. The Impact of Peak Boomer Retirements on Social Security and Medicare……..47
XI. The Impact of Peak Boomer Retirements on the Economy, 2024 to 2030……….50
XII. Conclusions ………………………………………………………………………………………….55
Copyright © Alliance for Lifetime Income. All rights reserved.
From the press release about the study:
In a definitive study commissioned by the ALI Retirement Income Institute examining the economic impact of the greatest surge of retirement-age Americans in U.S. history, the former Under Secretary of Commerce for Economic Affairs, Robert J. Shapiro, finds that a majority of Americans who will turn age 65 between 2024 and 2030 are not financially prepared for retirement.
Between 2024 and 2030, 30.4 million Americans will turn age 65. These Peak Boomers represent the youngest, largest, and final cohort of the Baby Boomer generation.
Based on their assets and their likelihood of living up to 20 or more years in retirement, two-thirds of Peak Boomers will be challenged to maintain their lifestyles in retirement. More than half (52.5%) have assets of $250,000 or less, making it likely that they will run through their savings and have to rely mainly on Social Security for income. Another 14.6% have assets of $500,000 or less, so nearly two-thirds will strain to meet their needs in retirement.
“America has never seen so many people reaching retirement age over a short period, and well over half of them will find it challenging to meet their needs through their retirements,let alone maintain their current standard of living,” said Shapiro. “They lack the protected income that many older Boomers have from solid pensions or higher savings.”
“The saving grace for some Peak Boomers is that they can count on the added protected income that a pension provides in retirement,” said Jason Fichtner, Executive Director of the ALI Retirement Income Institute, and Chief Economist at the Bipartisan Policy Center. “However, since only 4% of all private sector workers had protected income from a pension as recently as 2020, this economic study of Peak Boomers should be a cautionary tale to all Americans planning for retirement.”
Impact of Boomers on The U.S. Economy
A few impacts will be millions of job vacancies, slower productivity gains, and added burdens on entitlement programs such as Social Security.
Productivity: Employers will have to replace between 10.8 million and 14.8 million Peak Boomer employees. This drain of experienced workers will directly dampen productivity by 0.9% to 1.3%.
GDP: The impact of their retirements will reduce GDP growth by 7.3% percent by 2030.
Consumer Spending: Peak Boomer consumer spending will decline 15.3% and hit the transportation sector the hardest. Other sectors that will be hurt are utilities and real estate.
Entitlement Programs: As Peak Boomers draw on SS and Medicare, their SS benefits will add $347 billion to entitlement spending by 2030, although the projected mortality of Boomers will offset 61% of Social Security’s additional costs and 58% of the additional costs for Medicare.
