Living longer is going to cost many baby boomers, according to a recent study conducted by The Employee Benefit Research Institute.
A third of middle-income workers will likely run out of money after 20 years of retirement and significantly more lower-income workers will deplete their savings after 10 years, according to the new study.
The nonpartisan research group based in Washington says its retirement readiness study found that living longer, saving too little and inadequate planning for health care costs will leave many retirees short of money to pay basic living expenses.
The study finds that 64 percent of workers earning less than $30,000 a year will run out of money within 10 years of retiring. About a third of workers making between $30,000 and $70,000 will run out of money after 20 years of retirement. One in 10 workers making more than $70,000 won't have enough money.
"Early" baby boomers, meaning people who now aged 56 to 62, have a 47 percent chance of not having enough money to pay basic retirement costs and uninsured medical expenses, the study concluded.
"Late" boomers aged 46 to 55, as well as Generation X workers aged 36 to 45, have about a 45 percent chance of running short on cash.
Jack VanDerhei, research director for EBRI and author of the study, says baby boomers need to stop deceiving themselves into thinking they are going to have enough money for retirement.
Many workers will likely be forced to continue working beyond retirement age.