News Not So Bad for Retiring Boomers

We believe many factors have worked against baby boomers and their efforts to retire over the last several years. But despite frequent talk to the contrary, the statistics say the retirement outlook may be looking up for this generation.

A new study by J.P. Morgan Asset Management found that the median boomer household owns approximately $253,000 of assets.1 Despite layoffs, market volatility and the general downturn in the economy during the first decade of the millennium, baby boomers as a group are in pretty good shape. The main reason is because they’ve been building their savings gradually over decades, to the point where a few economic challenges won’t adversely impact their post-career plans.

Many baby boomers also took advantage of strong economic surges during their peak earning years. As a result, the generation has quadrupled its aggregate net worth over the past 30 years.

Unfortunately, the report also reveals that about 75 percent of those median boomer assets are nonfinancial. In other words, they’re predominantly real estate.2 For those who are house-rich and cash-poor, we believe it may make sense, depending on your individual situation, to capitalize on that equity at some point between now and retirement.

Speaking of retirement, boomers are generally better prepared than the generations before and after. According to this latest research, adults ages 35 to 44 years old have a median net worth of approximately $47,000, whereas people that same age in the early 1990s had about $102,000.3

This could mean that younger generations may have to save more than those that came before them. Low income growth and modest asset returns may present greater challenges for future generations, but those approaching retirement age in the coming years appear poised to avoid such widespread issues.

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1 Michael S. Fischer. ThinkAdvisor.com. Oct. 14, 2015. “Boomers’ Wealth Poses Problems for U.S. Economy: J.P. Morgan.” Accessed April 27, 2016.
2 Ibid
3 Ibid

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