Many child boomers aren’t on monitor to retire with sufficient cash. They have some choices to regulate their trajectory, researchers stated, however these include trade-offs.
Simply 40% of staff who’re age 61 to 65 — the youngest members of the boomer cohort — are financially on monitor for retirement, in accordance with latest analysis from Vanguard, an asset supervisor and retirement plan administrator. That group may have sufficient earnings to fund their present life-style into retirement, researchers estimate.
The remaining are anticipated to fall quick. 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 individuals retire and declare Social Safety at age 65.
The findings come as a historic demographic shift, often known as “peak 65,” is underway within the U.S. A document variety of individuals — greater than 4 million a 12 months, or about 11,000 a day — are anticipated to show 65 yearly from 2024 to 2027.
After all, figuring out the “proper” amount of cash wanted to retire is an impossibility. Nobody is aware of how lengthy they’ll dwell or how a lot cash they could want for future retirement bills, corresponding to well being care or long-term care.
But boomers who suspect they will not be capable to maintain their present lifestyle are in a troublesome spot in comparison with youthful generations.
Gen Z and millennials, for instance, have many years 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 threat as they put together to start retirement withdrawals.
There could also be damaging implications for the U.S. economic 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: ‘We’ve this [retirement] disaster, it is doom and gloom,'” stated David Blanchett, an authorized monetary planner and head of retirement analysis at Prudential. “It isn’t almost as dangerous because it appears.”
Boomers do have just a few choices to assist shut any retirement-readiness hole. Nonetheless, the choices is probably not accessible or palatable to all households, he stated.
Listed below are three of them.
1. Working longer is a ‘silver bullet’
Nastasic | E+ | Getty Pictures
Delaying retirement is a “silver bullet” in terms of eliminating or shrinking a retirement funding hole, Blanchett stated.
“Even pushing again retirement again just a few years can do wonders for retirement outcomes,” he stated.
That is as a result of working longer would yield extra career-funded financial savings, increased Social Safety earnings for all times as a result of delayed claiming, and fewer years of retirement to fund, in accordance with 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.
Nonetheless, not everybody shall be ready to work longer, even when that is one thing they plan to do.
“It isn’t an possibility that is out there for all,” stated Kelly Hahn, head of retirement analysis in Vanguard’s Funding Technique Group.
In 2025, 40% of retirees stated they left the workforce sooner than deliberate, in accordance to the Worker Profit Analysis Institute’s Retirement Confidence Survey. That share has been roughly comparable for the previous twenty years, hovering round 40% to 50%.
A few of the causes for an unexpectedly early exit embody well being issues and layoffs.
2. Deal with the ‘tough matter’ of house fairness
A “For Sale” sign up entrance of a house in Crockett, California, US, on Wednesday, Nov. 12, 2025.
David Paul Morris | Bloomberg | Getty Pictures
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 have been of their peak incomes years, Hahn stated.
“They did not actually profit totally from the pensions their dad and mom or grandparents could have had,” or from the newer 401(okay)-type system of financial savings, she stated.
Nonetheless, the majority are sitting on a big non-liquid asset, Hahn stated: their properties.
The overwhelming majority — 86% — of child boomers personal properties, a a lot bigger share than youthful generations, in accordance with Vanguard calculations based mostly on the Federal Reserve’s most up-to-date Survey of Shopper Funds.
The typical boomer has $113,000 of house fairness, in accordance with 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 a lot of methods to entry these funds, specialists stated.
“The one which gives you the most important bang in your buck from a quantitative standpoint” is promoting one’s house outright and changing into a renter as an alternative of a home-owner, Hahn stated.
Owners may also take into account promoting their present house and downsizing, shifting to a lower-cost space, or borrowing towards their house fairness by way of a reverse mortgage or a house fairness line of credit score.
Nonetheless, tapping house fairness is usually a “tough matter,” Hahn stated.
Most individuals are reluctant to show to their house as a piggy financial institution, viewing it as an alternative as an asset of final resort, Blanchett stated.
“The house is the biggest tangible asset for many People,” he stated. “It is a viable possibility in concept, however up to now it has been comparatively unpopular.”
Even pushing again retirement again just a few 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 1’s id, doubtlessly making it troublesome to promote, Hahn stated.
Owners with a mortgage who secured their mortgage when charges have been low may really feel locked in, given increased rates of interest now, she stated.
Moreover, accessing house fairness by way of a reverse mortgage or HELOC will also be expensive and time-consuming, Blanchett stated. Owners have to get authorised for the mortgage, which regularly comes with implicit or express prices, he stated.
Social connectivity can also be a “essential facet of a cheerful retirement,” Blanchett stated. Retirees must weigh the lack of their group and social community towards the monetary necessity of relocating, he stated.
3. Spend much less
After all, individuals may also take into account spending much less each earlier than and throughout retirement, Blanchett stated.
Saving extra money towards the tail finish of 1’s working years may help accomplish that purpose by forcing households to dwell on diminished money circulate, he stated.
The standard retiree experiences a 20% decline of their consumption once they enter retirement, maybe as a result of an absence of financial savings causes a discount of their spending, in accordance with Blanchett’s analysis.
Nonetheless, knowledge suggests about 90% are reasonably or very happy with their retirement, he stated.
“These responses strongly counsel 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 identify of the corporate.