NEW YORK (TheStreet) — There's a downside to living longer.
One of the biggest fears for retiring Baby Boomers is outliving their savings. But that's the reality facing more Americans starting at 50 years old.
Some 12.2% of seniors who died at age 85 or older had no assets left, according to a study by the Employee Benefit Research Institute. And among singles who died at ages 85 or above, 9.1% had outstanding debt averaging $6,368, not including a mortgage.
“Though quite stark, these findings are not a surprise,” said Bob Gavlak, certified financial planner with Strategic Wealth Partners in Columbus, Ohio. “I have found far too large a portion of clients have not properly planned or saved for retirement.”
The general thought of these individuals is they will figure it out when the time comes and live off Social Security. However, that income may not be enough without a pension.
“We’re seeing the first generation of retirees who have some accounts beyond just a pension,” said Anne Coveney, senior manager of Thought Leadership, the research arm of T. Rowe Price (TROW) that uncovers investor trends and behaviors. “They may have pensions as well as 401(k) plans but the pensions are not as much of a source of income as in previous generations.”
Among current retirees who have rollover IRAs or 401(k) plans, some 42% of household income is from Social Security compared to 18% from pension plans and 17% is from other retirement plans, including 401(k) plans and IRAs, according to new research from T. Rowe Price.