Boomers Unprepared For Retirement

graphic about baby boomers' retirement fears, showing shrinking nest egg, social security card, and some cash

Few had as many lessons to teach about their golden years as Eileen Albert. At age 67, Albert is competing in her first triathlon.

"I'm ready to do this, I've practiced, I've trained, and I'm doing it. Rain or shine," she says.

CBS News Correspondent Lee Cowan discovered that Albert will be swimming the breast stroke for 400 meters, bike riding for 20 kilometers and running for another 5 kilometers.

It is something most people in their 30s would be leery about completing. But for Eileen, training for the triathlon, was one of the luxuries of retirement.

She says she saved religiously by always putting the maximum into her company's retirement plan. And Albert never spoiled anyone rotten.

"The kids didn't always have what everybody had growing up, they had what was needed," she says. "They got to do the things they really wanted to, but they didn't get everything."

It paid off. Since she retired, Albert hasn't had to dip into her savings once. The retiree says there is no real secret to saving. She explains that you just have to think before you spend.

Albert, however, is not your average retiree. She is an example of what retirement can be if you chose it. But are golden years that are empty of work and full of leisure time really what baby boomers want?

The boomers — some 77 million strong — are, after all, a generation that took it for granted that it could change the world, whether it was civil rights or the sexual revolution.

Now they may be about the change the definition of retirement. Because although "Boomers" have had more opportunities, more earning potential, and the most overall wealth of any generation in history. John Rother of the AARP says they are woefully unprepared for the future.

"Boomers, as a generation, have really grown up in a time of prosperity," he says. "They've really not been called to sacrifice for their country the way the previous generations have. And so it's a little bit of a self-centered generation, and one that maybe has not had in the experience they've had so far, to really think much about sacrificing today for the benefit of tomorrow."

How large should that sacrifice be? Financial planners strongly suggest having at least 70 percent of your current income saved up for every retirement year you think you'll have.

It's a lot of saving, but a recent study by the U.S. Census Bureau showed that about 41 percent of workers between the ages of 25 and 64 had any kind of retirement account. And half of those who did had balances of less than $33,000.

They didn't get much incentive from Jack Nicholson, who in the movie "About Schmidt" made retirement look more like a funeral than a party.

"I think a lot of people retire and then find that there's really not all that much that they wanted to do," Shelle Shakerdge says. "I mean, how much golf can you play?"

Shakerdge is a Baby Boomer who now lives in a town that screams the '60s: Woodstock.

"You have to live life for now," she says. "You can't try to pinch and save for every penny that you make and not enjoy it yourself."

Shakerdge says she doesn't know anyone who saves for retirement when they could enjoy it today.

She and her husband Bruce say it's not that they're self-centered. In fact, most of their expendable income goes to their 13-year-old daughter Aerial, and her first love: horses.

"She spends her time at a stable in a positive way. And we need to support that for her," Shakerdge explains. "And if it's costing me money, then it's a good investment."

Bruce Shakerdge says, "If you live for the future, you're always living in the future. You're not living today. It's an important distinction. And I think that may be the thing that separates today's generation from the last one."

The trade off? Both Shelle and Bruce will have to keep working, probably well into their 70s.

In fact, one survey showed that 69 percent of older Americans plan on doing the very same thing.

It's not a bad theory, says financial writer Jane Bryant Quinn, except for one problem.

"You think, 'I can work till I drop so I don't have to worry about saving,'" she says. "That will be true for some people, but for other people that will not be true. They'll drop earlier and then they're not going to have the money they needed."

That's what happened to Willie and Juanita Grant.

Married for nearly half a century, they thought they had planned for a life of leisure — sitting back and watching Willie's favorite team, the Seattle Mariners, and his batboy grandson.

But then, Willie had a heart attack.

"I didn't know whether I wanted to retire or not, until I got sick, cause I'd never been sick before," he recalls. "So after that hit me, I decided, maybe I better get out and enjoy myself a little bit more instead of working all the time."

So he retired early. But soon, the medical bills started mounting. For four years into his retirement, instead of watching the Mariners, he's now working for them. And so is his wife.

"It supplemented our income so we could make sure he had his medications that he needs," says Juanita Grant.

It's stories like the Grant's that are causing "Baby Boomer" booms at retirement seminars.

Nearly two-thirds of today's workers don't even know what their goals should be because they haven't even begun to figure out how much they will need.
Online "retirement calculators" offer a hand, but they may seem more about fortune telling than fact.

When Ralph Bruno tried to calculate what he would need, he was shocked at the number.

"A financial planner told us that if we're going to retire at the age of 62, that we would have to have at least $1.2 million in the bank to continue living the way we are."

And 'the way they are' is comfortable, but not extravagant.

Most boomers simply can't save that much. Many are counting on Social Security to cover the bulk of it, because nearly half don't have a pension plan either and even those with 401k's are finding most of their savings tied up in the stock market.

"Look at all these people who retired just before the market crashed, for example," Jane Bryant Quinn says. "They thought they were on Easy Street, but all of a sudden, their savings went away. And they have to go back to work."

Which brings us back to Eileen Albert, who somehow dodged all these bullets.

"I knew what I wanted," she says. "I wanted to be independent. I don't want my children to have to take care of me, and I think I'm going to be okay. And I think that's the way it's going to be."

In case you're wondering, as a rookie, Albert finished first in her age category at the triathlon. It seems she's a veteran at winning races in life and in retirement. She's already got a head start on a lot of younger competitors.