Does this sound like you?  Probably not, and you’re definitely not alone.

Looking and planning ahead are not the trademark of the Baby Boomer generation.  Want proof?  The Employee Benefit Research Institute (EBRI) reported in April that, “62% of today’s workers are expecting retirement income from a traditional pension plan.”  Well that’s wonderful, except, the report also noted that only 41% of those responding to the survey have a pension plan.  I guess a lot of people still believe that money grows on trees, and they’re hoping to grow one.. Either that, or about 20% of today’s Boomer workforce is counting on finding a future job that has a pension benefit, which in the current economy is becoming increasingly unlikely as companies reduce defined benefit offerings for their employees and increase contributions from their retired former employees.

What’s actually happening in many companies is a push toward workers saving for their own retirement through savings vehicles such as 401(k) s and other tax-advantaged savings plans.  While that approach makes sense, there’s more bad news regarding today’s workers and saving. Part of the research survey reported that many workers have less than $10,000 in total savings and investments, not including the value of their primary residence and defined benefit plans. Here are the results:

Age Group % with less than $10,000 in total savings

25-34   50%
35-44   36%
45-54   24%
55-plus  26%

(Source: Employee Benefit Research Institute & Mathew Greenwald & Associates, Inc.)

Unfortunately, too many workers fail to understand or adapt to shifts away from company-based pensions or fail to take advantage of these plans.  At some level, most workers understand that the shift away from traditional pensions will impact them personally and directly, but only 24% of those affected, according to the survey report, indicated that they will save more on their own, and only 8% stated that they will save more in the employer’s plan as a result of these changes.

The next big shock regarding Boomers and retirement will come from problems in government funding of Medicare.  The problems facing Medicare are enormous, and even in the face of almost daily warnings about the government’s ability to fund Medicare at current levels, most workers are not taking any steps to prepare to pay more, perhaps much more, for their required healthcare during retirement. With healthcare costs rising at more than twice the rate of annual inflation, most Boomers don’t understand that their share of Medicare, the monthly charge for Part “B” is continuing to go up every year, as are costs for Medigap policies and prescriptions. They’re simply not financially prepared to deal with these increase costs, and aren’t saving as a hedge against their future needs.

So how bad is the savings situation, really?  Again, the EBRI Report indicated that almost half of all workers who reported that they are saving for retirement reported that they have less than $25,000 in total savings, not including their primary residence.  For the older Baby Boomers, it’s equally bad: one in four – 25% of working Boomers 55 years of age and older reported having savings of less than $10,000 and more than half of this age group have less than $100,000, while only 28% have saved $250,000 or more.  The most disturbing aspect of this is that most workers haven’t even tried to calculate how much money they will need for a reasonable retirement. Yet most remain confident that they will have enough money for a comfortable retirement.  One idea to deal with this challenge successfully is to seek professional advice for retirement planning.  But here too, Boomers and most workers seem to be reluctant to do so.

It’s obvious to anyone who pays attention to most economic reports that many workers are far too overconfident about their retirement and future security.  There is no magic solution to saving. It takes discipline.  All indications are that government healthcare programs, like Medicare cannot be sustained at today’s levels, and without having your own money to make up any shortfalls, your concept of retirement may not come close to your reality when that time comes.

Of course, I could be wrong, and perhaps for most Boomers everything will just somehow magically work out.  I’m not willing to risk that, but I sure wish I could find one of those money trees that apparently so many of them are planning on growing.

Next time, we’ll discuss the Top 10 nutrition myths, and tell you the truth about many of the foods you eat. Until then, be well and prosper.