Two-Third of Peak Baby Boomers Are Not Financially Prepared For Retirement

More than half of 30.4 million peak boomers will rely primarily on Social Security for income; women have 30% less in savings than men; 10% of workers exiting the workforce will depress U.S. GDP and consumer spending, causing double digit turnover in key economic sectors and increasing business costs.

Washington, DC, April 18, 2024 – In a definitive study commissioned by the ALI Retirement Income Institute examining the economic impact of the greatest surge of retirement age Americans in U.S. history, the former Under Secretary of Commerce for Economic Affairs, Robert J. Shapiro, finds that a majority of Americans who will turn age 65 between 2024 and 2030 are not financially prepared for retirement.

Between 2024 and 2030, 30.4 million Americans will turn age 65. These Peak Boomers represent the youngest, largest, and final cohort of the Baby Boomer generation.

Based on their assets and their likelihood of living up to 20 or more years in retirement, two-thirds of Peak Boomers will be challenged to maintain their lifestyles in retirement. More than half (52.5%) have assets of $250,000 or less, making it likely that they will run through their savings and have to rely mainly on Social Security for income. Another 14.6% have assets of $500,000 or less, so nearly two-thirds will strain to meet their needs in retirement. On average, Social Security is intended to replace about 40% of a person’s annual pre-retirement income, according to the Social Security Administration.

“America has never seen so many people reaching retirement age over a short period, and well over half of them will find it challenging to meet their needs through their retirements, let alone maintain their current standard of living,” said Shapiro. “They lack the protected income that many older Boomers have from solid pensions or higher savings.”

There are stark differences in retirement savings and security based on gender, race and ethnicity, and education. While the median retirement savings for all Peak Boomers is $225,000, it is $269,000 for men versus $185,000 for women… $299,000 for whites versus $123,000 for Hispanics and $49,000 for Blacks…  and $591,000 for college graduates versus $75,000 for high school graduates and $7,000 for those without high school diplomas.

24% of Peak Boomers have defined benefit pensions; and among them, the demographic disparities are modest. Private employers provide about half of those pensions and state and local government provide just under half.  Based on 2022 data, however, the median annual benefit for the public defined benefit pensions is $25,450 or 44% greater than the median benefit of $17,640 for the private ones.

“The saving grace for some Peak Boomers is that they can count on the added protected income that a pension provides in retirement,” said Jason Fichtner, Executive Director of the ALI Retirement Income Institute, and Chief Economist at the Bipartisan Policy Center. “However, since only 4% of all private sectors workers had protected income from a pension as recently as 2020, this economic study of Peak Boomers should be a cautionary tale to all Americans planning for retirement.”


Between 2024 and 2030, the retirement of Peak Boomers, who currently fill 10% of U.S. jobs, will have a range of effects on our economy, from the many millions of job vacancies and slower productivity gains to added burdens on entitlement programs such as Social Security.

·       Productivity: Employers will have to replace between 10.8 million and 14.8 million Peak Boomer employees, including 1 to 2 million each in manufacturing, construction, health care, education, and professional services. This unprecedented drain of experienced workers will directly dampen productivity by 0.9% to 1.3%.

·       GDP:  While other factors, notably younger generations filling the positions vacated by Peak Boomers, will partially offset these effects, the direct impact of their retirements will reduce GDP growth by 7.3% percent by 2030.

·       Consumer Spending: In retirement, Peak Boomer consumer spending will decline 15.3% and hit the transportation sector the hardest. Other sectors facing significant downdrafts from those retirements include utilities, wholesale trade, and real estate.

·       Entitlement Programs: As Peak Boomers draw on Social Security and Medicare, their benefits will add $347 billion to entitlement spending by 2030, although the projected mortality of Boomers will offset 61% of Social Security’s additional costs and 58% of the additional costs for Medicare.


The Alliance for Lifetime Income (ALI) is a non-profit 501(c)(6) consumer education organization based in Washington, D.C., that creates awareness and educates Americans about the value and importance of having protected income in retirement. Our vision is for a country where no American has to face the prospect of running out of money in retirement. The Alliance provides consumers and financial professionals with unique educational resources and interactive tools to use in building retirement income strategies and plans. We believe annuities – one of only three sources of protected lifetime income – can be an important part of the solution for retirement security in America. The Alliance’s Retirement Income Institute houses the leading retirement scholars and experts who create evidence-based research and analysis, with practical ideas and actions to help protect retirees.


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