Retirement Concerns

Over the past 15 years, the retirement prospects of the Baby Boom Generation (people born from 1946 to 1964) have become a source of public concern.

Some experts contend that low saving by boomers could limit economic growth in the United States and compound the financial pressures that face government programs such as Social Security and Medicare. The Congressional Budget Office (CBO) study--prepared at the request of the Chairman of the Senate Budget Committee--updates and expands on a 1993 CBO report on the retirement preparedness of boomers.

Having enjoyed historically high incomes over their working years, Baby Boomers make up one of the most prosperous generations in U.S. history. In the past 15 years, however, their finances have become a source of concern in policy circles and in the press as doubts have arisen about whether boomers are accumulating enough wealth to maintain their current or expected standards of living after they retire.

Studies reach varying conclusions about the retirement preparedness of boomers not only because of differences in methodology but also because researchers must depend on samples of the population, which may differ from study to study. Conclusions also vary because boomers' retirement incomes depend on future economic developments that are difficult to predict with any accuracy--developments such as future earnings and savings, returns on assets, retirement dates, life expectancy, changes in status (such as divorce, widowhood, and illness), pension incomes, the likelihood of and size of government benefits, and households' responses to changing circumstances.