Many child boomers aren’t on observe to retire with sufficient cash. They have some options to regulate their trajectory, researchers mentioned, however these come with trade-offs.
Simply 40% of employees who’re age 61 to 65 — the youngest members of the boomer cohort — are financially on observe for retirement, based on latest research from Vanguard, an asset supervisor and retirement plan administrator. That group may have sufficient revenue to fund their present life-style into retirement, researchers estimate.
The remaining are anticipated to fall brief. The standard — or, median — 61- to 65-year-old may have a $9,000 annual deficit in retirement, representing a 24% shortfall of their funding wants, Vanguard estimates.
Its evaluation assumes folks retire and claim Social Security at age 65.
The findings come as a historic demographic shift, referred to as “peak 65,” is underway within the U.S. A report variety of folks — greater than 4 million a yr, or about 11,000 a day — are expected to turn 65 yearly from 2024 to 2027.
In fact, understanding the “proper” sum of money wanted to retire is an impossibility. Nobody is aware of how lengthy they’ll stay or how a lot cash they could want for future retirement bills, equivalent to well being care or long-term care.
But boomers who suspect they will not have the ability to maintain their present lifestyle are in a troublesome spot in comparison with youthful generations.
Gen Z and millennials, for instance, have a long time to alter course, maybe by saving extra for retirement and incomes compound curiosity on these balances. Not so for near-retirees.
In comparison with youthful traders, boomers additionally typically maintain fewer shares — the everyday progress engine of a retirement portfolio — to insulate their financial savings from market danger as they put together to start retirement withdrawals.
There could also be unfavorable implications for the U.S. financial system if many boomers are ill-prepared for retirement and are pressured to chop spending to make their nest eggs final.
“Some economists sound alarm bells: ‘Now we have this [retirement] disaster, it is doom and gloom,'” mentioned David Blanchett, an authorized monetary planner and head of retirement analysis at Prudential. “It is not practically as unhealthy because it appears.”
Boomers do have a number of choices to assist shut any retirement-readiness hole. Nevertheless, the choices might not be accessible or palatable to all households, he mentioned.
Listed below are three of them.
1. Working longer is a ‘silver bullet’
Nastasic | E+ | Getty Photographs
Delaying retirement is a “silver bullet” in terms of eliminating or shrinking a retirement funding hole, Blanchett mentioned.
“Even pushing again retirement again a number of years can do wonders for retirement outcomes,” he mentioned.
That is as a result of working longer would yield extra career-funded financial savings, larger Social Safety revenue for all times because of delayed claiming, and fewer years of retirement to fund, based on Vanguard’s report.
For instance, working two years longer — e.g., retiring and claiming Social Safety advantages at age 67 — would enhance the share of 61- to 65-year-olds who’re ready for retirement to 47% from 40%, Vanguard discovered.
Nevertheless, not everybody will be able to work longer, even when that is one thing they plan to do.
“It is not an choice that is obtainable for all,” mentioned Kelly Hahn, head of retirement analysis in Vanguard’s Funding Technique Group.
In 2025, 40% of retirees mentioned they left the workforce sooner than deliberate, in accordance to the Worker Profit Analysis Institute’s Retirement Confidence Survey. That share has been roughly related for the previous 20 years, hovering round 40% to 50%.
Among the causes for an unexpectedly early exit embody well being issues and layoffs.
2. Tackle the ‘tough matter’ of residence fairness
A “For Sale” register entrance of a house in Crockett, California, US, on Wednesday, Nov. 12, 2025.
David Paul Morris | Bloomberg | Getty Photographs
Among the many causes for boomers’ considerably precarious monetary place relative to youthful generations: The office retirement system shifted from a pension-heavy system to a 401(okay)-type system, proper as younger boomers had been of their peak incomes years, Hahn mentioned.
“They did not actually profit absolutely from the pensions their mother and father or grandparents might have had,” or from the newer 401(okay)-type system of financial savings, she mentioned.
Nevertheless, the majority are sitting on a big non-liquid asset, Hahn mentioned: their properties.
The overwhelming majority — 86% — of child boomers personal properties, a a lot bigger share than youthful generations, based on Vanguard calculations based mostly on the Federal Reserve’s most up-to-date Survey of Client Funds.
The typical boomer has $113,000 of residence fairness, based on Vanguard’s report.
Tapping into that fairness would enhance the share of younger boomers financially ready for retirement to 60%, up from the baseline 40%, researchers estimated.
There are lots of methods to entry these funds, specialists mentioned.
“The one which provides you with the most important bang on your buck from a quantitative standpoint” is promoting one’s residence outright and turning into a renter as a substitute of a house owner, Hahn mentioned.
Owners may additionally contemplate promoting their present residence and downsizing, transferring to a lower-cost space, or borrowing in opposition to their residence fairness through a reverse mortgage or a house fairness line of credit score.
Nevertheless, tapping residence fairness is usually a “tough matter,” Hahn mentioned.
Most individuals are reluctant to show to their residence as a piggy financial institution, viewing it as a substitute as an asset of final resort, Blanchett mentioned.
“The house is the most important tangible asset for many Individuals,” he mentioned. “It is a viable choice in idea, however previously it has been comparatively unpopular.”
Even pushing again retirement again a number of years can do wonders for retirement outcomes.
David Blanchett
licensed monetary planner and head of retirement analysis at Prudential
A house typically comes with a robust emotional attachment to at least one’s id, probably making it tough to promote, Hahn mentioned.
Owners with a mortgage who secured their mortgage when charges had been low may also feel locked in, given larger rates of interest now, she mentioned.
Moreover, accessing residence fairness through a reverse mortgage or HELOC will also be pricey and time-consuming, Blanchett mentioned. Owners have to get accredited for the mortgage, which regularly comes with implicit or express prices, he mentioned.
Social connectivity can also be a “very important aspect of a contented retirement,” Blanchett mentioned. Retirees must weigh the lack of their group and social community in opposition to the monetary necessity of relocating, he mentioned.
3. Spend much less
In fact, folks may additionally contemplate spending much less each earlier than and throughout retirement, Blanchett mentioned.
Saving extra money towards the tail finish of 1’s working years may also help accomplish that objective by forcing households to stay on lowered money move, he mentioned.
The standard retiree experiences a 20% decline of their consumption once they enter retirement, maybe as a result of a scarcity of financial savings causes a discount of their spending, based on Blanchett’s research.
Nevertheless, knowledge suggests about 90% are reasonably or very glad with their retirement, he mentioned.
“These responses strongly recommend that regardless of perceptions of a retirement disaster, retirees are comparatively content material,” he wrote.
Correction: David Blanchett is head of retirement analysis at Prudential. An earlier model of this story misstated the title of the corporate.
