The Top 7 Financial Priorities for Baby Boomers
The giant baby boomer generation is confronting retirement realities and other life expenses while many remain in the workforce. A recent survey by the Transamerica Center for Retirement Studies reveals their top priorities as part of its comprehensive findings.
The 21st Annual Transamerica Retirement Survey of Workers was developed with the help of the Harris Poll, which surveyed a nationally representative group of more than 10,000 American workers, including boomers.
We used the report, which focuses on workers employed at for-profit companies, for the following look at the top priorities of baby boomers, now ages 57 to 75.
7. Supporting children
The pollsters found that 11% of baby boomers (Americans born in 1946 through 1964) cite supporting children as a priority. While many boomers may have adult children, that doesn’t necessarily stop them from opening their wallets to support them.
About 45% of all parents with adult children gave their kids an average of $4,154 during the coronavirus pandemic, says a recent survey by CreditCards.com. Many say that money otherwise would have gone toward their own personal finances.
If you need tips on weaning your children financially with love and respect, check out “6 Ways to Help Adult Children Without Going Broke.”
6. Creating an inheritance or financial legacy
While baby boomers are expected to pass along trillions of dollars to heirs and charities over the next 20 or so years, creating an inheritance or financial legacy was a priority for only 12% of boomers in the Transamerica Center survey.
While individual situations differ, of course, boomers are part of the wealthiest generation, holding more than $72 trillion in assets, according to the Federal Reserve. That compares with $42 trillion for Generation X and $11 trillion for millennials.
Still, nearly half of all baby boomers surveyed for the Transamerica Center fear they will outlive their wealth, as we reported in “The 2 Biggest Retirement Fears of Baby Boomers.”
5. Paying health care expenses
Paying health care expenses is a priority for 15% of surveyed baby boomers, which makes it a lower concern for them than for members of other generations.
More than 3 out of 4 workers across all generations are saving or have money saved to pay for health care expenses, pollsters report.
Among baby boomers, 63% say they have money for health care expenses in savings, checking or brokerage accounts; 19% have a health savings account; 11% have a flexible spending account; and 2% have saved in some other way. But 27% are not saving for health care expenses.
4. Just getting by
While 17% of working baby boomers surveyed say their financial priority is just getting by when it comes to covering basic living expenses, that share was lower than other generations reported.
The COVID-19 pandemic hasn’t helped the situation for some folks. Across the nation, nearly 25% of a broad spectrum of working adults told the Federal Reserve that they were worse off financially at the end of 2020 than they were a year earlier.
3. Building emergency savings
Building emergency savings is a priority for 36% of the surveyed baby boomers.
Workers’ emergency savings are alarmingly low but appear to increase by age, according to the Transamerica Center survey. While the median savings for all ages was $5,000, baby boomers’ emergency accounts had a median balance of $10,000.
2. Paying off debt
Paying off debt is a priority shared by people of all generations, the Transamerica Center says. For baby boomers, 53% note paying off debt as a priority, with 37% specifying credit card debt and 29% saying mortgages were their top debt priorities.
Baby boomers’ average debt was $97,290 in 2020, including everything from credit cards and personal loans to mortgages and student debt, says an Experian study. That’s just slightly higher than the overall average consumer debt of $92,727 and second to Generation X, whose members average $140,643 worth of debt.
Need help getting out of debt? Visit the Money Talks News Solutions Center to learn how to find a reputable, trustworthy credit counselor.
1. Saving for retirement
Baby boomers got a later start in saving for retirement than the generations that followed, so it may be no surprise that’s their top priority, cited by 75% of respondents in the Transamerica Center survey. The median age for starting to save for retirement, the survey found, was 35 for baby boomers, 30 for Generation X, 25 for millennials and 19 for Generation Z.
The survey found boomers think they will need $750,000 for a financially secure retirement, although 1 in 5 say it will take $2 million or more. Retirement savings for the older generation falls far short of these estimates, though, as the median total household retirement savings for boomers is just $202,000.
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