Understanding Baby Boomers’ Retirement Prospects
This chapter assesses Baby Boom retirement prospects by comparing the outlook for this cohort with experiences of previous generations. We simulate the impact of aging using the Social Security’s Model of Income in the Near Term and project retirement incomes for a representative group of individuals born between 1926 and 1965. We conclude that Baby Boomers can expect to have higher real incomes in retirement than current retirees and lower poverty rates. Yet the gains in family income are not equally distributed, so, for instance, never-married Boomer women will be relatively better off, and high school Boomer dropouts will be relatively worse off than current retirees. And when we compare Boomer retirement incomes to their own pre-retirement living standards, we find that post-retirement incomes are not predicted to rise as much as pre-retirement incomes. In addition, certain population subgroups will remain economically vulnerable, including divorced women, never-married men, Hispanics, high school dropouts, those with weak labor force attachments, and those with the lowest lifetime earnings.