Baby boomers facing retirement may be wishing they had come of age in a different era. According to a new Bankrate.com analysis, Americans reaching retirement age in this moment are facing the worst retirement climate in more than a generation.
The report is based on data from Morningstar and Research Affiliates and found: “Yields on stocks and bonds have declined so considerably that they’ve significantly weakened investments for people who are just about to retire.” Plus, according to the report:
According to the report: “A $1 million portfolio of 60% stocks and 40% bonds is projected to run out of money in 25 years.” Meanwhile, “someone who retired in 1980 with that same 60/40 portfolio would have received an average annual return of 6.9% over 30 years.”
This is worrisome at an individual level for anyone who is a baby boomer (or a child of one, working on, just as an example, a … ummm … public radio salary wondering how she would swing it if her mom needs her to fill in the gaps), but it’s also a concern at a societal level: The era of the 401(k) was founded on very different market realities than we are in now.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
