A Generation of Americans Is Entering Old Age the Least Prepared in Decades

A Wall Street Journal analysis found more than 40 percent of U.S. households headed by people aged 55 through 70 cannot maintain their living standards in retirement. Furthermore, new census data indicates this increase in aging baby boomers is leaving the United States with fewer young caregivers for seniors. Individuals will find themselves staying on the job beyond age 70 or taking menial work as senior citizens, and also will have to rely more on children for funding. Meanwhile, companies will have to deal with employees who postpone retirement, meaning they will have to cover the costs of a less healthy workforce and retraining older workers. This could further strain public resources, especially if seniors lower taxable spending and officials decide to cover additional public-assistance expenses for insolvent older Americans. Enticed by a long period of low interest rates, boomers accrued debt to cope with rising home, healthcare, and college costs. Interest-rate drops hurt this security, while reduced earnings on bonds spurred many insurance firms to hike premiums for the universal-life and long-term-care insurance many Americans bought to help pay expenses. Some public-sector workers are fraught with uncertainty as cash-strapped governments weigh pension cuts. For many facing a less secure retirement than the previous generation, the biggest factor is the switchover from pensions to 401(k)-type plans.