"Shauna Sharpes doesn't travel and grows much of her own food at her home in western Washington state. The payroll manager for a local Native American tribal authority has meager savings and expects she will have to keep working for at least the next decade.
Part of her challenge: She turned 60 in January, putting her at the tail end of a baby boom generation that is hurtling toward retirement age in uncertainty. Born in a midcentury, postwar America brimming with promise, many of the youngest boomers are still sporting financial bruises from the 2007-09 recession and the nation's steady shift away from guaranteed pensions.
"The most important things for me right now are a place to live indoors, water and food," said Sharpes, who has about $3,000 in her retirement accounts. "And thinking about how I'm going to provide that for myself from now until I drop dead."
By the end of this year, the youngest baby boomers will all turn 60. The birth dates of those in this generation -- around 70 million strong, or one in five Americans -- cover a 19-year span stretching from the aftermath of World War II to 1964, the year the Beatles made their debut on the Ed Sullivan Show.
Older Americans -- including young boomers with retirement accounts powered by a booming stock market -- remain a major force in the economy. Those 55 and up control nearly 70% of U.S. household wealth, Federal Reserve data show.
But that age group also includes older adults with little if any retirement funds socked away, or only Social Security to lean on, who are facing golden years laden with risk. For millions of younger boomers, who could live at least two more decades, a lost job or expensive medical problem could upend their stability, while ramping up pressure on younger generations.
The baby-boom generation's long span means the youngest boomers hit major life events at different times than their elders. Their midcareer years, when earnings typically start to peak, got upended by the 2007-09 financial shock, according to retirement experts.
Younger boomers without traditional pensions had to shoulder more investment risk while saving for retirement. There also is a greater share of nonwhite young boomers who are more likely to lack retirement accounts.
About a third of younger boomer households didn't have retirement benefits beyond Social Security in 2022, the most recent year available, according to a closely watched Federal Reserve tool called the Survey of Consumer Finances. When the older boomers were roughly the same age, a smaller amount -- one quarter -- were missing these retirement benefits.
More of these young boomers "are going to enter into retirement without the resources they need," said David John, who studies retirement savings issues at the AARP Public Policy Institute.
For many, making ends meet likely will mean having to work well into old age, if they are able. But they might also have to rely on younger family members as caregivers and for financial support.
Many seniors in poverty also could increase reliance on Medicaid, the health program for the poor, which foots bills for long-term care including nursing homes.
Sharpes, who has four adult daughters and lives in Oakville, Wash., lost roughly half the $20,000 in her 401(k) during the financial shock of 2007-09, she said. She applied the remainder to a home mortgage despite the steep penalty for early withdrawal.
Several years after the financial crisis, she said, she lost her job as controller of a small lumber yard when the company closed. Her marriage also ended.
Last year, she bought a rundown two-bedroom home on nearly 2 acres that she is rehabbing with her fiance. She hopes to at least cut back on work by age 70. To do that, she said, she will need to pay down $260,000 in home-related debt, while belatedly building a retirement nest egg. Her target: $100,000.
"It's not going to be a lot, I already know this," she said.
A recent study looking at the roughly 30 million young boomers who will turn 65 between this year and 2030 determined that just more than half have no more than $250,000 in financial assets.
This makes it likely these people will have to rely on Social Security after burning through savings as a primary source of income in retirement, according to the study, commissioned by the Washington, D.C.-based nonprofit Alliance for Lifetime Income, which advocates for retirement annuities, and includes insurers and financial-services companies.
"Social Security was never intended to be the sole source of income later in life," said Ramsey Alwin, chief executive at the National Council on Aging, which advocates for older peoples' financial security.
Researchers at Boston College's Center for Retirement Research, who have studied financial weaknesses among young boomers, said that there are several contributing factors.
One is that younger boomers are more diverse, especially because of growth in the Hispanic population. Recent census estimates show Hispanic people represent about 15% of the youngest boomers compared with 8% of the oldest.
Research has shown Hispanic people and Black people are far less likely to have access to retirement plans at their jobs, compared with the non-Hispanic white population. Low pay also discourages saving, say financial experts. Many Hispanic immigrants also send savings to family members in their native countries.
Some experts and some data sources don't see a firm divide among the boomer cohorts. Moreover, surging markets have aided young boomers who do have investment accounts, said Lowell Ricketts, a data scientist at the St. Louis Fed.
The Fed survey showed young boomers with 401(k) and individual retirement account plans in 2022 had more assets in them than older boomers did when they were the same age. The median for young boomers was $189,000, while the median for older boomers, nine years earlier, and adjusted for inflation, was just under $143,000.
The survey doesn't take into account the value of pensions and Social Security.
But the many young boomers without such accounts face gloomier prospects, Ricketts said, adding, "That can translate to just a diminished standard of living later in life."
Keith Seawell, 60, has no retirement savings accounts and rents the apartment near Baltimore he shares with his girlfriend and teenage daughter. He has been pulling in about $2,500 a month from a temporary administrative job, and Social Security disability payments stemming from a back injury he sustained working construction and other manual-labor jobs. Disability payments eventually convert to regular Social Security benefits.
Like other young boomers, Seawell says he has no intention to retire, because he doesn't want his four children to have to support him financially. Worsening back problems recently sidelined Seawell, requiring surgery. He said he hopes to rejoin the workforce after he recovers.
"I always felt I was the one that would have to be the provider, never looked at years down the road where they would have to do for me," Seawell said." [1]
1. U.S. News: Younger Baby Boomers See Financial Peril --- Recession, vanishing pensions leave many 60-year-olds in a precarious state. Kamp, Jon; Calvert, Scott; Overberg, Paul. Wall Street Journal, Eastern edition; New York, N.Y.. 24 July 2024: A.3.
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