The retirement of baby boomers has become a  major concern. It is partly due to the financial pressures that will arise as they collect Medicare and Social Security benefits. Moreover, there are claims saying that boomers failed to accumulate adequate private savings  to support their retirement.

It is a fact that the baby boomer generation (people born form 1946 to 1964) is marked as the most prosperous and largest generation in the history of the United States.  During the working years of baby boomers, they have  greatly enjoyed the benefits of their higher incomes creating substantial savings,  wherein some portions were allocated for retirement. Over the succeeding 25 years, they will be entitled of the government benefit programs. Boomers will also then start collecting private pensions and savings.

Recent studies provided a more precise picture on the finances of the boomers. The income of baby boomers is typically higher compared to their parents. For this matter, higher percentage of private wealth is kept by boomers in preparation for their retirement. Boomers will never live in poverty since they will obtain a higher income as they approaches retirement age.

These studies also show that only one-fourth of the boomer’s populations have failed in accumulating significant savings. These boomers will retire dependent on the benefits provided by the government in retirement. One half of the household population is predicted to maintain working-age living standards upon retirement. But the government laws on federal benefit plans must remain unchanged. The remaining one fourth of household boomers shows mixed results. They will suffer moderate decline on their standard of living. Slowly increasing their savings as well as working for a couple of years more could compensate it. Many boomers fear the future alteration of government retirement benefits.

The impending wave of retirees’ becomes a major concern because their populations will increase at a rate higher than the taxpaying workforce. The average benefits for each retiree will also increase. This will create mounting and severe pressure on the budget of the federal government. Another concern  is that the government is not sure if all boomers have accumulated enough wealth to utilize for retirement. It could compound the budgetary problems of the government limiting investment growth, wages, and productivity.
The current law states that government and Social Security benefits will be given to the retirees. Due to budgetary pressures, the levels of benefits might be reduced to meet the needs of baby boomers that belong to the lowest income distribution. Their expectation of receiving all the benefits induces them on less saving and underestimates the alarming difficulties of uncertainties in the future.  The boomers retirement will surely bring great changes in the economy of America.

LINDA WILHITE resides in Eastern New Mexico. She works in business development, empowering entrepreneurs of all ages to achieve their dreams in the home business industry.