Seeking Alpha

Retirement Advisor: Where Have The Late Boomers' Retirement Gone? (Podcast)

by: SA For FAs
SA For FAs
Senior Editor, FA Content
Summary

The Center for Retirement Research reports a little-known demographic difficulty: the significant drop in 401(K) and IRA assets for “late boomers,” aged 55 to 65, beginning with the Great Recession.

As the first group to spend the majority of their careers in the realm of 401(K)s rather than defined-benefit pensions, their average 401(K) balances should be higher than older boomers.

But in 2016, they had under $30,000 in defined-contribution assets, compared to $56,000 for early boomers and $51,000 for middle boomers.

Losing their jobs in their mid-40s is likely key to their falling behind, but it doesn’t explain the whole problem. The researchers offer ideas, and I add my thoughts.

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Boston College's Center for Retirement Research reports a little-known demographic difficulty: the significant drop in 401(k) and IRA assets for “late boomers,” aged 55 to 65, beginning with the Great Recession.

This podcast (6:49) explains the report’s findings and the researchers’ tentative conclusions, and adds some possible lines of further research inquiry. Overall, the unexpectedly sharp fall in retirement wealth for this cohort should strengthen our motivation to shift assets towards our future needs.