Baby Boomers, those between the ages of 59 and 75, still make up a significant portion of the U.S. workforce, despite many having hit retirement age. As one of the largest generations in history, Baby Boomers are faced with their own set of unique financial stressors.
Retirement savings are the most obvious concern for Baby Boomers, 54 percent of whom report losing sleep over money issues. In addition to stress over retirement savings, however, Baby Boomers are also worried about having a robust emergency fund in the case of unexpected expenses and they’re also stressed about rising healthcare costs.
Baby Boomers Emergency Savings Stress
The recommended amount for an emergency fund is six months worth of expenses, but a whopping 20 percent of Baby Boomers have less than $5,000 in personal savings, according to Northwestern Mutual’s Planning and Progress Study. This leaves them woefully unprepared for any unexpected expenses, such as a medical emergency or loss of employment.
Further, one-third of this generation find it difficult to meet their household expenses on time each month, and nearly 60 percent would not be able to meet their basic expenses if they were out of work for an extended period of time.
Healthcare Costs Hinder Financial Wellness
Healthcare costs are rising at a rapid rate, and Baby Boomers are particularly susceptible to the increases. Those 65 and older spend 41 percent or more of their average Social Security income on health care — a number that is expected to rise to 50 percent within the next decade. This means that Baby Boomers need to be saving even more as they approach retirement — more than one-third of them say healthcare costs were their biggest worry regarding retirement.
A large portion, 27 percent, of Baby Boomers, report that lower healthcare costs would most help them achieve their future financial goals, making healthcare a top concern.
Retirement Savings and Baby Boomer Financial Stress
Finally, stress regarding retirement is the most significant financial stressor facing Baby Boomers, as most are concerned about not being able to retire when they want to. About 40 percent are also worried about running out of money while in retirement, and that same percentage have less than $50,000 saved towards their retirement funds.
More than half of Baby Boomers are planning to delay their retirement for a variety of reasons, but the most commonly cited are that they haven’t saved enough, don’t want to retire yet, have too much debt or need to keep the healthcare coverage offered at their jobs. These concerns regarding retirement make it clear that simply having a 401(k) set up is not enough to aid employees in their retirement planning.
Baby Boomers note financial matters as their main cause of stress, and they are the most likely to take advantage of workplace financial wellness programs, like Best Money Moves, to alleviate their stress. Best Money Moves is a mobile, gamified and easy-to-use financial wellness program. It provides practical, unbiased help so employees can make smarter financial decisions and manage the debt they have.
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