by: Begley Law Group

by Thomas D. Begley, Jr., CELA

Nothing is likely to have greater impact on public policy and programs for the elderly than the aging of the Baby Boomers (“Boomers”). Boomers represent 76 million persons in the United States born between 1946 and 1964 – 31% of the total population. Boomers are divided into two waves. The first wave was born between 1946 and 1954 and is currently between 61 and 69 years of age. The second wave was born between 1955 and 1964 and is currently between 51 and 60 years of age. By the year 2030, all surviving members of this generation will be between the ages of 66 and 84 and 90% will be retired by the year 2030.[1] By 2020, close to one-third of the population will be over age 55. Despite the conventional wisdom that Boomers are ready to “work forever” and significantly extend their formal working career, many of the oldest Boomers are already well into the retirement phase. Many more expect to retire upon becoming eligible for full Social Security Retirement benefits.

  • Forty-five percent of 65-year old Boomers are now fully retired with another 14% reporting that they are retired but working part-time or seasonally.
  • Of those who have not yet retired, 61% plan to retire when they reach 68.5 and are eligible for full Social Security Retirement.
  • Forty-five percent of Boomers who retired earlier than planned cited health-related reasons for doing so. Sixteen percent cited loss of a job or job opportunities. Those who retired later than they had planned mentioned needing a salary to pay for day-to-day expenses.
  • Sixty-three percent of Boomers have started receiving Social Security benefits prior to reaching full retirement age.
  • Seventy percent of retirees report liking retirement “a lot.”
  • Twenty-five percent of Boomers received an inheritance from their parents with an average value, before taxes, of $110,000.

As Boomers age, it is useful to study a profile of the average Boomer. MetLife performed such a study.[2] The study showed that the average 62-year old in 2007 was married to the same spouse, who was 60-years old, had 2.4 children over the age of 18 who were not living at home, has two grandchildren also not living in their home, and has no living parents. These individuals tend to have very good health, have some college education, and worked full time. They feel they have done a good job earning income, but a poor job saving for their own future, investing for their children’s future, and ensuring coverage for their long-term care costs. They are politically conservative. They have decided to take Social Security benefits earlier than the normal retirement age. A sizeable portion applies for benefits at age 62 and plan to be fully retired by age 66-years 4 months.

Changes in the global economy have caused a decline in the number of manufacturing jobs in the United States and a move toward service jobs, requiring higher level of skill and education. Fifty-six percent of Boomers will rely on Social Security for over one-half of their income and estimates are that Boomers will save only one-third of the amount required to provide them with a secure retirement at age 65.[3] Further, Boomers have high consumer debt, including education loans, and are borrowing, or will soon need to borrow, to finance their own children’s educations. The National Association of Area Agencies on Aging predicts that, “Baby boomers will have better health in their late 60s and 70s due to better personal care, more healthful work environments, and better health practices throughout their adult lives.”

The retirement of Boomers will put a tremendous stress on the Social Security and Medicare systems. Policymakers, particularly those on the right, will be tempted to reduce benefits to maintain the solvency of both the Social Security and Medicare systems. Such a change would cause serious issues for many Boomers who have retired with no pension, little retirement savings through 401ks, little equity in their homes, and high consumer debt. All of these reasons, and particularly a lack of pensions, makes Social Security even more important to Boomers who are retiring.

The General Accounting Office (GAO) found that an annual drawdown of savings at an annual rate of 4%, coupled with a delay in Social Security, was a good strategy for Boomers to employ for retirement. The longer Social Security is delayed, the higher the monthly payment. Therefore, drawing down on savings first will ultimately lead to a higher monthly check from the Social Security Administration.

There is a dramatic difference between the first wave of Boomers and the second wave. The older wave is better educated and is more likely to be married. The most important source of income for Boomers is earnings from employment, and singled boomers generally earn less than married ones. Also, 71% of first-wave Boomers own their own homes, while only 57% of those in the second wave own homes. As a result, poverty rates in 1990 were one-third higher for those in the second wave of Boomers than for those in the first wave. [4]

According to the National Association of Area Agencies on Aging, large numbers will face economic risk and deprivation, because of a history of low earnings, intermittent employment, poor education, discrimination, and an inability to adjust to changing employer requirements. The most influential variables for a Boomer’s retirement are marital status and level of education.[5]

One of the factors making retirement for many Boomers is the lack of income from pensions. Public sector employees generally receive pensions. Private sector employees generally receive benefits from defined contribution plans, such as 401ks, and 401ks tend to be much less generously funded and pay out much smaller benefits.


[1] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

[2] Highlights of the MetLife Study of Boomers: Ready to Launch, MetLife Mature Market Institute, www.metlife.com (Nov. 2007).

[3] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.

[4] Transitioning into Retirement, The MetLife Study of Baby Boomers at 65 (April 2012).

[5] P. Berg & A. Collins, Baby Boomers: Issues and Trends Summary Analysis Including Opportunities for the Aging Network, National Association of Area Agencies on Aging.