Somnath Basu has a very interesting article in Financial Advisor magazine about the demographics of the baby boomer retirement market. This is something that every advisor needs to pay attention to. He pulls together a lot of good data from EBRI and BLS, and also has a few conclusions like this one:
For retirement savings data, we turn to Employee Benefits Research Institute (EBRI) reports. For 2010, EBRI data shows that people over 60 employed for 30 or more years had about $200,000 in their 401(k) accounts, while people in their 50s are poised to retire with similar account balances. Even if we didn’t take living costs into account, it is obvious that these amounts are inadequate, even for two-income families. Moreover, the time required to undo such gross errors is running out.
When I look at quotes for even a joint life annuity, $200,000 generates only about $950-1000 per month—clearly not enough to live on. Must reading for advisors. Save until it hurts.
