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 Over
the past 25 years, changes in public
and private policies have profoundly
altered the retirement landscape
that current and future generations
of older adults face. Gone is the
three-legged stool of Social Security,
pension and retirement savings.
The age of eligibility for Social
Security has gradually increased,
and future benefits may offer lower
lifetime value due to financial
demands on the system. On the private
side, individual workers have seen
a shift away from defined benefit
pensions and health benefits in
retirement, to be replaced by an
opportunity to save in individual
employer sponsored retirement plans,
such as 401(k) plans. Such plans
generally rely upon individuals
choosing to opt into them, and people’s
willingness to save. In addition,
the value of many accounts rests
upon the performance of financial
markets.
The leading edge of the Baby Boomer
generation turned 60 in 2006, and
over the next several decades millions
of Boomers will enter retirement
with more education, greater experience
with technology, and higher expectations
for their lifestyles and activities
after they retire. Old expectations
about needing 70-80% of pre-retirement
income to live on in retirement
may not be enough to fit with how
Baby Boomers plan to spend their
time in retirement, and the rising
costs of healthcare may demand a
greater share of retirees’
incomes.
In spite of these changes in the
retirement system and Boomers’
increased expectations for life
in retirement, relatively few people
plan or save adequately for their
retirement. The overall goal of
this research project is understand
better the different paths people
take toward planning and preparing
for retirement – what makes
people successful, and what factors
impede planning.
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