Baby Boomers Near 65 With Retirements In Jeopardy - MSNBC/AP

[WillyT]

Baby boomers near 65 with retirements in jeopardy
Many find smaller pensions, higher health costs, lower housing values pinching on their bottom line
By DAVE CARPENTER - AP
updated 12/27/2010 5:21:16 PM ET

<snip>

CHICAGO — Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they're hoping to retire.

Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.

The boomers, who in their youth revolutionized everything from music to race relations, are set to redefine retirement. But a generation that made its mark in the tumultuous 1960s now faces a crisis as it hits its own mid-60s.

"The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early," says Olivia Mitchell, director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania.

There are several reasons to be concerned:

-The traditional pension plan is disappearing. In 1980, some 39 percent of private-sector workers had a pension that guaranteed a steady payout during retirement. Today that number stands closer to 15 percent, according to the Employee Benefit Research Institute.

-Reliance on stocks in retirement plans is greater than ever; 42 percent of those workers now have 401(k)s. But the past decade has been a lost one for stocks, with the Standard & Poor's 500 index posting total returns of just 4 percent since the beginning of 2000.

-Many retirees banked on their homes as their retirement fund. But the crash in housing prices has slashed almost a third of a typical home's value. Now 22 percent of homeowners, or nearly 11 million people, owe more on their mortgage than their home is worth. Many are boomers.

<snip>

More: http://www.msnbc.msn.com/id/40821458/ns/business-your_retirement/

:kick:

[Warpy]

1. The only thing that will save us is remembering how to raise holy buggering fuck

the way we did during the Vietnam War, violent fringe groups and all.

[Stinky The Clown]

12. I completely agree

Not much else to do.

[SoCalDem]

2. This story could have been written in 1981

Somewhere in the bowels of the Reagan Admin, some pretty clever people realized that the Boomers were ripe for the picking...and that by the time they figured it all out, it would be too late..and they would be S.O.L..

It was inevitable..

[PJPhreak]

9. I think it goes further back than the Raygun Admin,

A lot of people that were in both the Ragun Admin and the Bush II admin...were also in the Nixon Admin.

Think about this...We (The Boomers) rip the Establishment a new one in the 60's,We scared the crap outta them,they thought that we might actually succeed in changing the status quo,forever.
The Establishment spent almost 40 years up to that point setting up "The System" as it was and a bunch of cheeky youngsters are gonna toss it in the trash,so to speak and start over? Not in this lifetime!

So what better way to pay back the "Hippies" that tore down so many walls and changed this Country forever?

Let them think that their financial futures are secure...and then take it ALL away from them,pull the rug right out from under their feet and set them on their Ass!

NO S.S.,no 401k,no savings,house underwater,no jobs,NO NOTHING,NADA,NICHT!!

Now their thinking...Lets see these Hippie Bastards deal with this!!!

I know it sounds like Tin Foil Hat Shit but what better way to pay us back.

[virgogal]

3. Most boomers should not be affected by the housing crisis

since they have owned their homes for years.

The lack of pension and the losses in stock holdings is another matter.

[WillyT]

4. Wouldn't That Depend On The Last Time They Re-Financed Their Home, And For How Much ???

I'm asking, cause I really don't know.

:shrug:

:hi:

[virgogal]

7. Of course it would,but most would not have refinanced. Some,

of course,would have,and would be affected by the burst bubble.

[spooky3]

13. that's not really so, for many people

1) boomers have changed jobs like everyone else has at different times - the average period for owning a house is about 8 years.
2) even those who owned for a long time and did not refinance and spend that borrowed money on non-house things are affected unless they plan to stay in the same house until they die. For example, if you bought at $100K, put in another $100K in improvements over time, and could have sold in 2007 at $300K, you now may be facing a market where you could get only $220K, which after the expenses of sale means you net 0. If you were going to sell and use some of that equity to fund retirement, you no longer can do that. That is not saying that you're in a worse position than people who don't even have that much $. I'm just saying that nearly everyone was affected by the bubble and bust, to some degree.

[SoCalDem]

15. We Boomers were the "mobile-generation".. We got moved all over the place

for jobs, and every time you move, you have the opportunity to spend extra money and you always play real-estate-roulette if you buy. Many in my generation delayed home-buying and then got caught in the high interest rates (we paid 15.8% in Denver), just as our children's needs were ramping up.

Pay-raises (real ones) pretty much stopped for many of us, but then "plastic" came along, and many fell prey to the allure of buy now pay later.

As debt piled up, the EZ equity loans came along, so there are probably millions of Boomers who have little or no equity...if they even HAVE a house they are trying to buy..

For the ones who were lucky enough to stay put, in a home they liked enough to stay in, and who earned enough money (at the right time in their lives) to never do the cash-out refi or equity extraction, lower property value now is not that big of a deal, but for millions that ONE house (paid for or not) was their "ticket" for retirement security.

They could live in it payment-free if it was paid off (with only taxes & insurance to worry about).

They could sell it, and buy a smaller place with cash & have some extra to live on.

We have bought 3 houses ...in a seller's market each time, and sold twice..in a buyer's market, so personally, I cannot identify with the people who made money on real estate. Each time it was "move or lose your job", so we had no real choice in it (we had a handicapped child with a serious need to maintain our insurance with the company my husband worked for..and they knew it).

Each time we chose the "least ugly" option, since we had very few options.

We LIVE in our home..it's not an "investment".

A few years back houses just like ours (but not as nice) were SELLING for $385K..and now those same houses are selling for $145K, so we are royally STUCK.. That's why we are remodeling and have resigned ourselves to staying:)

[SharonAnn]

5. And through the theft of their pension funds, the collapse of companies, and the economic

downturn which was caused by Wall Street fraud, not "bad timing".

There is some component of individual "bad planning", but the major components are the loss of pensions and the cratering of their investments due to Wall Street fraud.

[indepat]

6. Told my Fidelity rep over a decade ago that Wall Street would find a way to get our

401(k)s. What a sap I was thinking they'd only get our 401(k)s. :shrug:

[NNN0LHI]

8. Add one more thing to smaller pensions, higher health costs, lower housing values

Add skyrocketing property taxes on top of that and this is my story.

Don

[MuseRider]

10. Retiring too early?

Really? Says who? I did not know we were required to work until a certain age. Sorry all, we saved and were out at 55. Yes we are lucky but had we known we would still be working. Sorry, nobody told us.

Jesus.

[MuseRider]

11. Dupe, sorry

[spooky3]

14. the "lost decade" comment is the most important - even if people had saved more they would have lost

a lot of it to the greedy fraudsters on Wall Street.