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As baby boomers retire in very large numbers, they face extra challenges caused by negative changes in the economy and stock market which have damaged and depleted pension funds and investments. Many boomers may be faced with drastic reductions in income after retirement and many are expressing the concern that their retirements may have to be delayed.
January 1, 2011 is a very significant day for the baby boomer generation. It is then that the first of this enormous generation of somewhere between 77 and 79 million individuals turns 65 and reaches what has normally been considered the standard age to retire from work.
For those born in 1946, the age will remain 65 for qualifying for Social Security and Medicare eligibility. For those baby boomers born a few years later, that date will be pushed back to 66 or 67, and there are now proposals to change the age to 70 for everyone.
Downward turns in the economy have complicated the retirement picture for baby boomers thinking about retirement. Many of them now say that they will have to delay retirement because they simply cannot afford it. Social Security Retirement benefits alone usually only provide for a very modest lifestyle and other sources of income have been compromised. Some pension funds have deteriorated and many private investment plans have suffered greatly from a plunging stock market. It is not unusual to hear that a baby boomer has lost half or more of their retirement savings.
Baby boomers retire at staggering rates over the next 19 years if normal predictions hold true. An estimated 10,000 of them will turn 65 each and every day of that 19 years. For a great many of them retirement will mean adjusting to a lower and fixed income. To add to the gloomy outlook, even the safety net of Social Security is being seen as not entirely solvent and predictions of it running out of money in another 20 or so years are becoming common.
While the vast majority of baby boomers now near retirement will not have to bear the expenses of raising children, they face other expenses that may be unavoidable. Soaring real estate prices and rising taxes may mean that retired boomers who own their homes and have paid off their mortgages may still be threatened by property taxes so high that they may have great difficulty making ends meet. Even if they try to downsize to a smaller and less valuable house, selling the current one may prove impossible in a very tight lending market.
As baby boomers retire and grow older, the complaints related to the aging process often mean higher health care costs. As good as Medicare is, it covers only 80% of allowed services and even the Part B and Part D ( prescription drug coverage) premiums may be a hardship for those in the lower income groups.