How much money do you need to retire? How will you support yourself and your family? Is social security enough? Demographers and researchers are studying the unique financial challenges facing the aging baby boomer generation. According to a recent study by Wichita State University, between 2014 and 2029, the age 65-plus population will grow almost seven times faster than the overall population and by 2029, 20 percent of the population will be 65-plus, up from 13 percent now. The retirement wave will impact housing, health care and retirement savings in a number of significant ways and all experts agree that a comfortable retirement will require a significant commitment to savings.
These are questions that many organizations such as the US Government Accountability Office (GAO) have asked and studied in depth. In a recent study, the 2013 Survey of Consumer Finances, the GAO found that many current retirees and workers on the verge of retirement do not in fact have the financial power to live “in a style of which they’d like to aspire” – as many do not have any retirement savings at all.
The GAO reports that as baby boomers move into retirement each year, the “Census Bureau projects that the age 65-and-older population will grow over 50 percent between 2015 and 2030.” As such, over time, shifts in pensions and other factors will affect people’s attitudes and actions as they near retirement.
Currently the GAO reports that 48% of potential retirees have some savings. However, the GAO also noted that households age 55 and older – 29-percent have neither retirement savings nor an employer-sponsored pension plan (called DB Plans). The ones who do have retirement savings, seem to have other resources such as non-retirement savings and DB plans. However, those retirees with savings often average about $104,000 for those aged 55-64 and $148,000 for households aged 65-74. According to the GAO, “…this is an equivalent to an inflation-protected annuity of $310 and $649 per month, respectively.”
The GAO found that most households approaching retirement are turning to social security income. Some may also look into their investments such as their home. For instance, 35-percent of retirees own a home with no debt; 24-percent own a home with some debt. A large percentage, 41-percent, do not own a home at all.
In addition, among other challenges facing retirees, many (in fact two-thirds according to the GAO) will fall short of making their lives as comfortable as they were when employed. The GAO says that this has brought on a much lower level of confidence in their savings or financial situation in people ages 55 to 64.
With stock market prices hitting all-time highs, the Dow Jones Industrial Average recently surpassed 20,000 for the first time, there is also risk that equities may be due for a significant correction. Accordingly, a number of investment experts recommend allocating a portion of retirement savings in gold and silver, non-correlated assets that can act as a hedge against a market downturn. The IRS allows selected retirement accounts such as an IRA, Individual 401(k), HSA, or ESA to hold certain precious metals. A gold IRA or silver IRA is rapidly emerging as one of the most popular trends in retirement savings. GSI Exchange now offers a Physical Possession IRA and other alternatives for investors to protect their retirement savings with precious metals.