Legg Mason Survey Finds Baby Boomers Are Roughly $30 Trillion Short On Retirement Savings

Tyler Durden's picture

There are roughly 76 million Baby Boomers in the United States that are about to transition out of the highest wage earning years of their lives and into retirement where they'll be making precisely nothing.  Unfortunately, as MarketWatch points out today, those Baby Boomers are woefully unprepared for what awaits them.

According to Legg Mason, the average Baby Boomer needs roughly $650,000 to fund their retirement years but have only managed to save about about $250,000 in their defined contribution plans.  Now, while equity markets don't seem to think this is a big deal, someone will eventually have to cover that $30 trillion shortfall...and, we suspect that's a funding hole that even the American taxpayers can't cover.

Baby boomers, or those born between 1946 and 1964, expect they’ll need $658,000 in their defined contribution plans by the time they retire, but the average in those employer-sponsored plans is $263,000, according to a survey of 900 investors by financial services firm Legg Mason. Older boomers, who are 65 to 74, have an average of $300,000. Their asset allocation for all of their investments are also conservative, according to QS Investors, an investment management firm Legg Mason acquired in 2014, with 30% in cash, 24% in equities, 22% in fixed income, 4% in non-traditional assets, 8% in investment real estate, 2% in gold and other precious metals and 8% in other investments.

 

“They have less than half the assets they hope to have in retirement,” said James Norman, president of QS Investors. “That’s a pretty big miss.”

Baby Boomers

 

Of course, it's not just Baby Boomers who are bad savers.  Generation X is not much better off...

Americans across the country, and all age groups, are drastically under-saved for retirement. Only a third of Americans who have access to a 401(k) plan contribute to it, and previous research suggests the typical middle-aged American couple only has $5,000 saved for the future. Meanwhile, millennials may not be able to picture themselves in retirement at all, though are urged by financial professionals to make a habit of saving, if even only as little as $5.

 

Generation X, or those born between 1965 and 1981, aren’t doing all that much better, though they have the benefit of more time to reach their financial goals. More of them have a defined contribution plan, according to the Legg Mason survey, with an average of $199,000 stashed away for a goal of $541,000 by retirement. They are also investing conservatively, with 25% in cash, 21% in equities, 17% in fixed income, 11% in non-traditional assets, 16% in investment real estate, 7% in gold and other precious metals and 4% in other investments. Conversely, QS Investors suggest their Gen-X aged clients have 80% in equities, which faces more risks from the stock market but could also realize higher returns.

Meanwhile, we've frequently noted the Millennials' distaste for saving money with the majority of them having less that $1,000 set aside for emergencies.

The majority of millennials are living paycheck to paycheck.

 

A recent survey of millennials by HowMuch.net found that 51.8% of those aged 18-34 have less than $1,000 held between bank accounts and cash savings.

 

As Visual Capitalist's Jeff Desjardins notes, this echoes previous data we’ve seen – not just on millennials, but Americans in general. For example, we know that 14% of Americans have “negative” wealth. We also know that 62% of Americans don’t have emergency savings that could cover a $1,000 hospital visit or a $500 car repair.

 

Taking that into consideration, let’s dive deeper into this more recent millennial data...

Courtesy of: Visual Capitalist

 

Oh well, we're sure it will all just naturally sort itself out.

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Mr. Universe's picture

Get to the heart of the problem. Boomers (and others) will watch their pitiful savings diminish and disappear, eaten by the child of the Creature from Jekyll Island, inflation.

GUS100CORRINA's picture

Legg Mason Survey Finds Baby Boomers Are Roughly $30 Trillion Short On Retirement Savings

My response: Don't worry, be happy. Go get a PINA COLADA and RELAX.

President TRUMP will just go into the markets and borrow another 5 Trillion. That amount should hold the USA together for awhile longer.

People who do these surveys must think mankind is going to live forever.

The_Juggernaut's picture

They'll all be living in RVs.  Long campgrounds!

Croesus's picture

I don't buy the averages...with wealth disparity being what it is...let's subtract the net worth of the .01%'ers, and redo those numbers, focusing on "most people". I'm genX, and one of the few I know who actually has positive net worth...that's of course with no mortgage, no debt, no student loans, no kids, no alimony payments, etc.

Most peoples' single largest 'asset' is their home...where's home buying at these days?

This is just another useless survey that paints a distorted view of reality.

The DotGov's about due to make another grab for those private retirement accounts, a la, "We'll nationalize your 401k, and give you this GRA instead"...

bonin006's picture

The averages may be numerically correct but meaningless. Remember talk about Mitt Romney's $100,000,000 IRA? He and 153 people with nothing at all have an average of $650,000.

DontGive's picture

No worries. There's a printer involved in all this prosperity.

Boomers will get cornholed for sure, especially the cockchuggers with gov pensions. Can't wait!

Anon2017's picture

But this year Mitt has to make his first Required Minimum Distribution. He will be paying a lot of income tax this year.

EuroZone's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://disq.us/url?url=http%3A%2F%2Fwww.amrica.win%3A0hVV72vUxBddqgfhVJ6...

yogibear's picture

Hey, Dudley, Yellen, Evans and Bullard, All the baby-boomers are waiting for their $1 million each helicopter money you were talking about.

You enjoy printing 10s of trillions to trash the US dollar,.

Follow-through on your promise.

e_goldstein's picture

You go long campgrounds, I'm buying up all the real estate under overpasses and bridges.

peippe's picture

Jugg, they are not even campgrounds, just pads with power/water at $550/month within walking distance of Safeway grocery.

They are going like hotcakes up in the NW. 100+ slots in 2 shy acres, like an ATM.

vato poco's picture

well then quit whining and get creative, you whiny-ass baby boom old fucks!

example: hit men currently cost waaaaay too much! business opportunity! now get cracking, you self-absorbed ancient morons

bonin006's picture

From years ago when I used to read newspapers, I got the idea from reading crime reports that there must be way more FBI agents hanging out in bars posing as hit men, than actual hit men.

dunce's picture

Very rich people hire lawyers that hire the hit men and launder the money, that way the rich person has no contact with the hitman and the lawyer has privilidged communication much like Hillary's hits. two degrees of separation.

The Wizard's picture

My response: Don't worry, be happy. Go get a PINA COLADA and RELAX.

Robots are here to save the day, be happy.

peopledontwanttruth's picture

The next crash will wipe out pensions who are WAY underfunded and all the other retirement accounts. With inflation 30 trillion won't touch it. When the US defaults does anyone really believe anyone will have Medicaid or SS? We're not in Kansas anymore Toto

It's culling time.

CheapBastard's picture

I read 15% have ZERO saved for retirement.

 

"If you want to keep your retirement dreams, you can keep your retirement dreams. I promise!"

peopledontwanttruth's picture

You're the norm not the the other way around

Croesus's picture

"They are also investing conservatively, with 25% in cash, 21% in equities, 17% in fixed income, 11% in non-traditional assets, 16% in investment real estate, 7% in gold and other precious metals and 4% in other investments."

To share some thoughts, for the benefit of younger readers:

Personally, I'm 25% cash, 50% 'non-traditional', 25% PM's. 2% of my cash is in banks, everything else is "around somewhere".

This is not meant as advice, and is only for educational purposes. The lessons are that, by setting things up this way:

- Wall St. gets zilch.

- I have 100% control over, and access to 98% of my assets, 24-7, 365. Possession is 9/10's of the law, and I can live with a 2% hit, in the event of government-sanctioned robbery.

- My 'non-traditional' investments include
about 30 different collections, including art, antique furniture (early US), fine guns, rare knives, rare books, edged weapons, US type coins, and Imperial military awards. For the benefit of the reader who is not a collector of anything:

- These areas are predominately cash markets.

- Valuable things, don't always look like they're worth much:
http://www.gunbroker.com/item/673262920#carousel-modal-view-item

- Collecting the way I have, has allowed me to network with a lot of like-minded people; it's important - it makes "quiet disposal" a lot easier. Networking in these areas also makes fee-free, no-interest loans possible.

- One of the little side-benefits of collecting certain kinds of things is that hiding large amounts of money from a spouse/significant other is easier.

You'll thank me, if you ever have the misfortune of going through a nasty divorce. If you're a straight man, you are not part of a protected class. The courts won't hesitate to bend you over, and leave you homeless in the gutter. As a straight man with a few bucks, you have to consider the possibility that EVERYONE is trying to screw you over somehow; they probably are.

If you're a father, and old-school, you want your kids to have it...not see it all sold to pay off the ex, and some God-damned lawyers - not see it "sold to pay estate taxes", etc.

As a part of estate planning, it's the easy way to give assets to the kids: "Here ya go, enjoy"; no paperwork, no taxes, nothing. As long as they know what it is, what it's worth, how to move it...they're good.

The name of the game is to make your assets invisible. Nobody's going to screw you over, if they don't think you have anything.

Stuck on Zero's picture

I'm in gold, silver, lead, and foodstuffs.

Swamidon's picture

When one type of dollar collapses it must be replaced with another.  The easiest, best and only way for a new dollar to be introduced is by distributing it to people already in the system, ie, through Social Security and Pensions.

The Wizard's picture

The question remains, what will it be replaced with and who will write the rules and control it? Will it be the same cast of characters?

peopledontwanttruth's picture

This beast will not go quietly into the night. When the pound ceased as the reserve currency. They seen it coming after WWI so made plans to move their operations from GB WITH GB blessings, The banksters then set their sights on the rich and powerful USA. Through FDR stolen the gold, set up the Great Depression and WWII. Now with knowledge they can't find another host to suck dry, as the world moves away from the dollar this banking whore with her military beast won't go quietly but go down in flames.

RichardParker's picture

Heart of the problem?

Most of the jobs in this country don't pay anymore.  In MANY fields, they're now offering salaries that were considered competitive compensation 10-20 years ago.

And let's not forget about the skyrocketing costs that have been shoved down our throats by the education /medical complex during this time as well.

People aren't saving anything anymore?  Gee, I wonder why? 

Stupid article...

yogibear's picture

"And let's not forget about the skyrocketing costs "

Go into Walgreens and try buying that bag of nuys the was 99 cents 2 months ago.

Now it's double that.

The Fed is getting massive inflation, but not reporting it. All hidden.

Fed's policy is boiling us slowly, while saying there's no inflation.

Cheyenne01's picture

Let's not forget the U.S. Government "borrowed" from SS to fund all the wonderful wars.

petroglyph's picture

I think they just printed the last few wars, didn't even bother to steal it. Just fucking charged Iraq ++. And the lying congress doesn't even have to take the blame, ain't that special.

My retirement is basically being spent by my ex and her boyfriend. It seems I worked to much, and should have been more romantic and less exhausted. Blame it on me, a boomer, if it helps, but I'm quite certain I have worked since well before I was ten years old and never owned even one video game. The government didn't have my permission for any of this shit. I've raged against the machine since the early 70's. Same as today, nobody wants to hear it. It's your turn M's, see what you can do with it.

Jack McGriff's picture

The spawn of The Creature from Jekyll Island is usury, sired by their father, Jews.    

veritas semper vinces's picture

This 30 Trillion is not gone or lost .It's in kosher hands.

peopledontwanttruth's picture

Got my Walmart application ready like the rest already there who believed Uncle Scam

GoldHermit's picture

I say this all the time. Tick, tick, tick.....

Only way out - print more and more money. Got gold????

yogibear's picture

Aleady happening.

Central Banks are already flooding markets with $200 billion/month QE.

The central banks know they are stuck doing financial intervention daily.

A zero chance of price discovery ever happening.

PontifexMaximus's picture

THEY have to take care of me, otherwise I go to prison with 75.

forestgump227's picture

Eat shit baby boomers.

 

You made this bed, now lie in it.

lasvegaspersona's picture

Think youngling...or try...

boomers are just first in line to get fucked...or have you not learned that yet?

U4 eee aaa's picture

As they institutionalized abortion, so shall they institutionalize euthanasia

Newbie lurker's picture

You are getting downvoted but it's true. The boomers lived high on the hog their whole lives....barring the early 70s fuel embargo....

They like to blame millenials for their poor voting and allowing .gov to mortgage the farm. Fuck you boomers - signed Millenials.

Al Gophilia's picture

May I remind you of the purpose of the education system; i.e. its successful delivery of the monumental  fairy tale - compounding interest. Their story, seen in any high school math text is; you put some money in a magic box and presto-change-o, after a bit of time delay, out pops more money! Everyone believes it. We'll all be rich if you just put your excess cash into a magic box called a bank! (I've actually seen it illustrated this way and watch the students gobble it up with wide-eyed visions of riches beyond belief).

You're probably invested in it as well, unless all of your savings are in monies rather than currencies. Point your indignation at the correct target.

End the Fed and then think about the nature of the revolt that will be necessary to end your dependence.

What do you think Henry Ford was referring to when he said, "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning"?

Answer......

https://www.quora.com/What-do-you-think-Henry-Ford-was-referring-to-when...

Newbie lurker's picture

I agree with your reply to my statement. I know the FED and our monetary system is the root of the problem but I would like to lay some blame at the feet of the generation who benefited from it for so long and now wants to bitch and complain about the fallout. Boomers think they are owed something even though they get Social Security and ridiculous returns on their real estate. All of the sudden they are figuring out they have to pull back on their lavish hopes and are flabbergasted.

Boomers are the ones who have benefited from and lived in a monetary utopia.... now the subsequent generations are proper fucked.

libertyanyday's picture

boomers are no more the problem than depositors at a bank.. the problem is that retirement is a phenomena that should not exist and is on its way to proving that it will not exist............to save a dollar today and withdraw 10 dollars 40 yrs from now wont work........ever.

Our currency is being devalued faster than ' interest ' is being payed .........simple math.

The Wizard's picture

Anyone with half a brain would understand the history of enslavement goes back to the Reconstruction Era post War of Northern Aggression. The incorporation of the United States began the process of a private group taking over the currency of the nation. Blaming one generation over another is ridiculous.

There is no doubt in my mind most, in all generations, are clueless as to how we have been enslaved by control freaks who are Satanic miscreants. The educational system and media has been highly successful dumbing people down to ignorant subjects.

Aggie5's picture

You have to go much farther back than the Boomer generation to see who screwed this country and the economic system. Boomers weren't around to vote for FDR and all his socialist crap, and they weren't old enough to vote for LBJ and his Great Society con. Boomers have been paying exorbitant taxes over the years to support benefits for the so-called greatest generation. The parents and grandparents of Boomers are the last ones who will enjoy the largesse from these Ponzi schemes. Boomers got left holding the empty bag, as will all succeeding generations until everything collapses. 

autofixer's picture

You will make an excellent drone.

pitz's picture

The boomers overly funded too many unprofitable endeavours.  Such as government (by buying bonds and muni debt), and tech companies of dubious value, particularly in the 'advertising' space. 

 

Never One Roach's picture

I'm with Bernie!

My senior neighbor said he was counting on Bernie to hand out more free shit when he got elected.

Then he counted on Hillary...but she lost. He said if he were young he'd slip on one of those black antif outfits and riot also for more free shit, but at this age, he said he might get hurt if a Trump supporter even gets balls enough to fight back.

I asked how much he's saved and it ain't much. But he's not alone. You can be sure the DNC will lube a Giant Dildoe to screw the private sector middle class to pay for all this shit when and if they get in power again.

Anyone else notice how Obama excluded government workers from Obamacare tax sodomy? The Dems will do the same thing with higher taxes to pay for all the trillions needed to support retirees and the younger FSA, illegals, immuigrants, etc..

The Dems will tax hard working middle class Americans in the private sector to death but exclude government workers so they continue to get their votes.

Classic.