I worry about these baby boomers

By LAURNIE CAPRONI

Tuesday, January 30, 2007 7:42 PM EST

According to research, they make up a staggering 27 percent of the U.S. population. The boomer generation, if it votes in a block, can be the mightiest political force in the country.

Baby Boomers account for a stunning 48 percent of all U.S. families with children living at home.

Nearly 70 percent of the boomers own their own homes, surely a number which boggles the mind.

Baby boomers have made, and are making, an astonishing amount of money. Tons of it.

The good news is this: Boomers, super-heated-consumers, have for many years fueled a spending spree which has helped drive the U.S. economy. They have dragged the rest of us with them, especially savers and small investors. They have our eternal gratitude.

Boomers have purchased everything under the sun -- and have done so in vast quantities. Cars, SUVs, TVs, computers, vacations, designer clothes, designer homes with designer entertainment centers, designer bedrooms, gourmet kitchens, gourmet foods, and gourmet bathrooms.

They have worked hard, played hard, gone on cruises, burned the candle on three ends, spent money, spent more money, and then spent money they didn’t have.

And that was just on themselves.

They spent even more on their children.

And now?

The bad news. Admiration and respect aside, here comes the worry. Baby Boomers, apparently by a landslide majority, don’t have nearly enough money to retire.

Consider this written by Brooks Clark, a certified financial planner in Birmingham, Ala.:

"Most Americans are in denial about retirement reality. Can you live on half of what you earn now? If you can, you might be ready for retirement."

Actor, attorney and author Ben Stein often speaks frankly about Americans' ineptness with regard to financial issues, especially retirement planning. Baby Boomers facing retirement, he said, "will suffer a greater decline in lifestyle upon entering retirement than any previous American generation."

Oh-oh.

Consider this:

-- Only one in 10 Americans know what annual income they will need for retirement

-- A full 30 percent of Americans do not participate in 401K plans made available to them

-- Less than 50 percent of workers age 20 to 29 participate in those same plans

-- Only about half contribute an amount which will maximize contributions from their employers.

And there is more.

Americans who live to age 65 can expect to live, on average, another 20 years -- at least.

Modest inflation of 3 percent over 25 years will devour one-half of your spending power. That is, it will take $2 in 2032 to buy what $1 buys today. Think of the Cookie Monster putting away Oreos.

If you are "living" on $50,000 or $60,000 or $70,000 a year now, how much are you going to need 10 years from now -- let alone 20 or 25 years from now?

I’ve heard Boomers say, "I’ll just work longer."

Don’t bet on it.

You may not feel like working when you're 78. Or 82. Beyond that, you can bet your gas-guzzler what you’ll be paid may not be enough to buy a postage stamp.

Wrote Clark: "The average American who participates in a 401K plan leaves for retirement with a total balance of less than $60,000 -- not exactly the ideal nest egg to see you through 25 years or more of retirement."

Worse, he added, "the bottom line (in today’s world) is that preparing for retirement is on your shoulders, not your employer’s."

It’s no wonder I worry.