the plus side, a new study shows, Americans’
retirement savings has rebounded from the depths of the
60 percent of workers say they have somewhat or fully
recovered from the 2007-2009 downturn and median savings
has risen substantially.
so, unless they’re holding sizable nest eggs under the
proverbial mattress, they still have a long way to go to
replace their income in retirement.
percent of baby boomers, the youngest of whom turn 50
this year, for example, have less than $100,000 in
retirement accounts, according to the Transamerica
Center for Retirement Studies annual survey.
Generation X savers, born between 1965 and 1978, more
than half have less than $100,000 saved.
born after 1978 and before 1997, were somewhat of a
bright spot. Just 20 percent have amassed more than
$100,000, but they benefited most from the post-2007
stock market recovery. Median savings for the group —
$32,000 — rose nearly fourfold from 2007 to 2014.
young adults seem to be saving more in addition to
simply having benefited from the market rally, said
Catherine Collinson, president of the Transamerica
Center for Retirement Studies.
seeing firsthand what’s happening to [the abruptly
stunted careers of] their baby boomer parents and
getting the message that it’s important to start
saving early," Collinson said.
their part, Boomers reported median savings of $127,000,
up from $75,000 in 2007. Gen Xers reported median
savings of $70,000, up from $32,000 in 2007.
the top of the range (among those who reported figures),
42 percent of Boomers, 24 percent of Gen Xers and 9
percent had retirement accounts of more than $250,000.
important to note a significant caveat in the data. The
survey asked how much people hold in all of their
retirement accounts, but didn’t ask about other
assets, such as home equity, taxable accounts, monthly
pensions or small businesses.
the numbers justify other findings in the survey that
show many people expect to work in some capacity after
their longtime careers are finished.
who make a plan and act on it end up with more assets in
retirement than those who don’t," said Carrie
Schwab-Pomerantz, author of the recently released
"The Charles Schwab Guide to Finances After
50." She’s the daughter of the discount brokerage
founder and an executive with the firm.
the book, written in Q&A format, she discusses a
variety of post-50 financial issues, from dealing with
boomerang adult children to deciding when to file for
Social Security benefits.
those whose retirement accounts are on the slim side,
Schwab-Pomerantz suggests beginning to build an
emergency cash cushion — invested very conservatively
and with no stocks — five years before your planned
retirement. So if you previously held a six-month
emergency reserve, double that to a year, she said.
think hard before paying off a mortgage ahead of
retirement if it will leave you with a very small nest
egg, she said.
a perception that you need to eliminate all debt when
you retire, but if you have $500,000 in assets and a
$150,000 mortgage, it’s not necessarily an automatic
affluent clients are getting surprised by
earlier-than-planned retirements and higher medical
costs, said Kathy Longo, president and founder of
Flourish Wealth Management in Edina, Minn.
are forced to live on a different budget than they
originally thought, so a lot of what we do is just
getting into detailed cash flow," she said.
"For some clients, a third of their budget is
medical expenses, and they can’t go back to work
because they’re caring for a spouse, so we know we’ll
have to cut way back on spending later."