Retirement Costs and Savings for Boomers

Retirement Costs and Savings for Boomers

Core Facts

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Retirement should be time of relaxation and reflection, not panic. For many people, the realities of what it takes to retire have snuck up on them. Healthcare becoming a regular part of life is an increasing worry, and the cost associated with keeping oneself alive and well is not only essential, but a constant fear for some. Once retired, a person must budget with the funds that have been set aside for these years. 

The recent economic changes in the U.S. have altered how Boomers view their retirement income sources. Just a few years ago, 4 in 10 Boomers felt sure that Social Security would be a major source of income, while 36% cited an employer-provided pension. Today, 59% of Boomers see Social Security as a major source, while only 26% expect a pension to provide significant income. 

Relying on Social Security is probably not the best option. The average Social Security payment in 2016 is $16,100.  So unless you plan to work well into your golden years, you’ll need to supplement this amount with personal savings. 

One of the biggest costs in retirement is healthcare. According to the Insured Retirement Institute (IRI), Boomers tend to underestimate healthcare costs in retirement. It’s a worrying trend that Boomers planning for retirement, allocate just 23% of their income for healthcare, when those aged 60 or older currently spend 33% of their income on healthcare. 

The EBRI’s Retirement Security Projection Model®  based on the simulated life paths of Early Baby Boomers and Late Baby Boomers showed that roughly 44% were projected to lack adequate retirement income for basic retirement expenses, plus uninsured healthcare costs.

With these facts in mind, it seems that more preparation early on could be the best defense against finding yourself in a bad situation later in life. Life can throw you a curveball, even when you are prepared. As the great Ben Franklin once said, “By failing to prepare, you are preparing to fail.” 



Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual’s personal circumstances. Member FINRA & SIPC


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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates Call 516-921-4200 Visit our website:

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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