Baby Boomer Generation Largely
Unprepared for Retirement
Roy W. Litherland
Baby Boomer Generation
Largely Unprepared for
One of the most poignant demographic trends that we are seeing in the United
States today is the rapid aging of the population. This is due to the fact that
members of the baby boomer generation are starting to enter their senior years.
"Baby boomers" are Americans who were born between 1946 and 1964, and
there are approximately 77 million baby boomers in the United States. This is
The average resulting in approximately 10,000 people applying for Social Security every
benefit for a single
individual in 2013 Can You Retire Comfortably on Social Security Alone?
is estimated at
While it is true that the vast majority of senior citizens are going to be
$1,261 per month.
collecting Social Security benefits when they reach the age of eligibility, Social
Security payouts are modest. The average benefit for a single individual in 2013
benefit for an is estimated at $1,261 per month. The average benefit for an eligible couple is
eligible couple is $2,048.
$2,048. This type of
Many people have rather lofty retirement goals, envisioning a life of leisure and
money is not going
travel. When you look at these average monthly benefits, you can see that this
to finance a truly
type of money is not going to finance a truly comfortable retirement.
Even those who receive more than the average are not going to be able to enjoy
true financial freedom. The maximum monthly Social Security benefit in 2013
for a single retiree is just $2,533 per month.
In spite of the limitations of Social Security, according to the Social Security
Administration 74% of single people who are enrolled in the program rely on
Social Security for most of their income. 53% of married senior couples derive
more than 50% of their income from Social Security.
46% of single senior citizens rely on Social Security for at least 90% of their
income, and this is true for 23% of the married couples who are receiving
Social Security benefits.
Many Boomers Polled Not Confident
There have been several studies conducted recently in an attempt to measure the
retirement preparedness of baby boomers. One of them was conducted by the
Associated Press in partnership with the popular website LifeGoesStrong.com.
Some 44% of the baby boomers polled stated that they were not confident they
would have the financial resources that they needed to enjoy a comfortable
A similar poll was conducted by the Insured Retirement Institute, which is a
nonprofit organization serving the insurance industry. This poll involved 803
people between the ages of 50 and 66. Only 40% of the people who participated
said that they were extremely confident that they would be able to retire
Two thirds of the respondents to the Insured Retirement Institute's poll said that
they were not confident about their ability to handle all of the medical expenses
that they anticipated during retirement. 75% of them did not feel as though they
were prepared to address potential long-term care costs that they may incur at
some point in the future.
Long-Term Care Costs
Law Office of Roy W. According to the United States Department of Health and Human Services,
Litherland once you reach the age of 65 there is a four out of ten chance that you will
3425 S. Bascom Ave, Ste . require a stay in a nursing home at some point in the future.
240, Campbell, CA 95008
408-356-9200 Most people who reach this age will need some type of living assistance
Each year the MetLife Mature Market Institute puts out a survey on the current
state of long-term care costs. In 2012, the average annual expense for a semi-
private room in a nursing home in the United States was just over $81,000. A
private room averaged $90,520 annually.
The U.S. Department of Health and Human Services tells us that 10% of people
who need nursing home care will stay in the nursing home for at least five
boomers have not
appropriately and Will Medicare Pay for Long-Term Care?
they may be forced
Medicare will certainly be of great assistance to baby boomers who need
to pay a hefty price. medical treatment as senior citizens. However, this program is not set up to pay
for an extended stay in a nursing home or assisted living community.
Are There Other Options?
Though Medicare won't pay for long-term care, Medicaid (which is called
Medi-Cal in California) will in fact pay these expenses if you can obtain
eligibility for the program. There is an upper asset limit of $2,000 that you must
stay within, but everything that you own does not count toward this limit.
Your home (up to a 2013 maximum equity limit of $802,000 in states with high
property values such as California), certain personal possessions and your
vehicle are not considered to be countable by the Medicaid program. And, the
healthy or “community spouse” may keep half of shared assets up to a
maximum of $115,920 in 2013.
Law Office of Roy W.
When you look at all the facts, you come away with the realization that it takes
3425 S. Bascom Ave, Ste .
careful advance planning to prepare for your active retirement years and
240, Campbell, CA 95008
the twilight years that will follow. Clearly, many baby boomers have not
planned ahead appropriately and they may be forced to pay a hefty price.
The wise course of action is to devise a cogent plan for the future with the
assistance of a licensed and experienced attorney who has a background in elder
law, retirement planning, and estate planning.
Your lawyer will gain an understanding of your retirement and legacy goals,
evaluate what is realistically possible for you, and create a cogent plan that
leads to the fruition of these goals.
If you go forward living in the moment without expert guidance, you may be
among the many who will never be able to retire.
Social Security Administration
About the Author
Roy Litherland is certified
Financial Security Project of Boston College
as a Legal Specialist in
Estate Planning, Trust and
Probate Law by the
California State Bar Board MSN Money
of Legal Specialization. Roy http://money.msn.com/saving-money-tips/post.aspx?post=a555deea-a470-4bc3-
is a member, former Board 8ebf-09c841
of Governor, and
designated Fellow of the
American Academy of
Estate Planning Attorneys
(AAEPA), a national
committed to assisting
attorneys in providing
quality estate planning
services to their clients.