For Retiring Boomers, 401(k)s Fall Short
For many, it means postponing retirement or picking up part-time work
By John Johnson, Newser Staff
Posted Feb 19, 2011 4:32 PM CST
401ks are falling short for baby boomers in retirement.   (Shutterstock)

(Newser) – With the first baby boomers beginning to retire, the Wall Street Journal takes a look at how well their 401(k)s are holding up. Conclusion, in the form of a question: What kind of part-time work would best suit you in your golden years? Most households don't have anywhere near the amount necessary in their 401(k) to maintain their standard of living, generally figured to be 85% of working income before retirement.

"Inevitably, we find that, for the average person, there is not enough there," says one financial adviser. One yardstick in the Journal article: For households led by people aged 60 to 62, the median 401(k) plan had about $149,000, which would generate about $9,000 annually for a couple. To generate $40,000—which combined with Social Security and other sources would get the typical household to that 85% mark—they'd need about $636,000 in their 401(k). Only about 8% of households can make that claim.

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Showing 3 of 8 comments
Feb 19, 2011 11:34 PM CST
The number assume reasonable inflation - not the Zimbabwe-style inflation Obama is trying to bring about. Retirees and those approaching it - you are screwed. Obama was born a Keynesian.
Feb 19, 2011 6:28 PM CST
What's not mentioned is any other kind of pension. Past retirees were more likely to have defined benefit pensions.
Feb 19, 2011 5:41 PM CST
Uh oh.