by Gary D. Halbert
March 25, 2014

1. Baby Boomer Retirement – Massive Savings Deficit

2. 60% of Americans Have Saved Less Than $25,000

3. How Much Money Do You Think You Need to Retire?

4. Baby Boomers Now Have to Play “Catch-Up”

5. Introducing Halbert Wealth’s “ALPHA ADVANTAGE”


Let’s face it, we all know this country is facing a retirement crisis. The first of the Baby Boomers turned 65 and started retiring in 2011. The number of Boomers retiring each year will rise rapidly over the next decade or more. Before the end of this decade, Boomers will be turning age 65 at the rate of 8,000 per day.

This massive retirement of Baby Boomers will stretch our health care and health delivery systems to the max and beyond. Our public safety net – entitlements – has long been poorly managed, ill-thought-out and threadbare. Imagine what will happen as tens of millions of Boomers retire.

Yet the worst part of all is that so few people or families have saved anywhere near enough for retirement. According to a survey conducted earlier this year, 60% of workers have saved less than $25,000 for their retirement. And 36% have saved less than $1,000. This is appalling!

Another new study found that 43% of Baby Boomers are at risk of running out of money in retirement. And this number is almost certainly understated because, as I will discuss below, many Boomers are untruthful about their assets when responding to retirement surveys. The point is, most Boomers are far, far behind in saving for their retirement.

Given the magnitude of the coming retirement crisis, it will be a continuing theme I will be writing about periodically in the months and years ahead. I hope to present you with some ideas for saving more for retirement and, of course, making more on your investments.

In that regard, I will be unveiling a new investment strategy that has me more excited than I’ve been in years! The risk/reward profile of this strategy is very impressive. We call it “ALPHA ADVANTAGE.” Trust me, you’re going to like what you see. I’ll talk a little more about it at the end of today’s E-Letter, but the details, including the performance, etc., will be unveiled in a special E-Mail to all clients and readers tomorrow. You don’t want to miss it!

Baby Boomer Retirement – Massive Savings Deficit

Remember how many of us worried in 2006 and 2007 that the housing market was in a bubble, and how it could end badly? Yet we were told by market analysts that it was different this time around, and that soaring home prices were here to stay. We all know how that turned out.

Yet here we go again. Just about everyone knows we are facing a looming retirement crisis. Tens of millions of “Baby Boomers” are starting to retire. They are going to live far longer than any previous generation. And they are going to need medical care and nursing care well beyond the needs of previous generations.

The so-called Baby Boomer generation are those roughly 77 million Americans born between 1946 and 1964. It was the largest generation ever created at that time. The first Baby Boomers turned 65 in 2011 and started retiring. That number will continue to rise rapidly over the next decade and longer. By the end of this decade, Boomers will be turning 65 at a rate of about 8,000 a day. As this unique cohort grows older, it will transform the institutions of aging – our entitlement systems – and threatens to bankrupt our nation.

Yet so few people or families have saved anywhere near enough for retirement, and our public safety net is poorly managed, ill-thought-out and threadbare. But even though we know the overall picture doesn’t add up, somehow everyone keeps on hoping for the best. Our politicians on both sides of the aisle refuse to touch our massive, unfunded entitlement programs.

Three new reports paint a bleak picture of what the future may look like for Americans when they retire. Most Americans haven’t saved nearly enough for their retirement, but there are even more things to be concerned about.

For example, many Americans may enjoy an overall standard of living well below that enjoyed by retirees in many other developed countries, according to a new analysis by money management giant Natixis (which owns bond firm Loomis Sayles, among others). Natixis looked at a broad array of measures, from economic factors to health care, and found that the US ranked 19th in the world for retirees’ quality of life. That is far below countries such as Switzerland and Norway, which (apparently) have sorted out their retirement systems, and we are behind most of the other leading developed nations.

“The United States narrowly holds its spot among the top 20 nations globally in its capacity to meet retirement security needs and expectations,” report Natixis researchers. They looked at 20 key performance indicators across five areas: health care, material well-being, finances in retirement, and broader areas like “quality of life” and the environment.

As an illustration, Natixis notes that we rank number-one in the world – by a longshot – in health spending per capita, but we are only 33rd in life expectancy, 52nd in the number of doctors per capita and 58th in hospital beds per person. Yet most Americans have no idea. We have long been told that the US healthcare system is the best in the world. So much for that!

How does this happen in the wealthiest country in the world? Consider these facts:

  • 46% of Americans have less than $10,000 saved for retirement. (Employment
    Benefit Research Institute)
  • 40% of baby boomers now plan to work until they die. (AARP)
  • 36% of Americans say they don’t contribute anything at all to their savings. (CNBC)
  • 87% of adults say they are not confident about having money for a comfortable retirement. (
  • Expected retirement age is up to 67 from age 63. (AARP)

Those who took the surveys pointed to the rising cost of living and day-to-day expenses as the reasons they are unable to save enough for retirement. And many also noted that rising healthcare and long-term care costs will have a major impact on their ability to afford a comfortable retirement.

60% of Americans Have Saved Less Than $25,000

Most Americans are in terrible financial shape for their retirement. The Boston College Center for Retirement Research has just updated its “National Retirement Risk Index,” a measure of just how many people can expect to be financially comfortable in retirement.

It doesn’t make for happy reading. According to Boston College, based on current projections, about half the country is at risk of being unable to maintain their standard of living in retirement. Among low-income workers, that rises to 60%. But it’s 40% even among the higher-income workers.

One of the stark issues that comes out of the report is how little the stock market boom has helped. As the Boston College researchers note, citing data from the Federal Reserve’s 2010 Survey of Consumer Finances, most people don’t own many stocks or mutual funds. Stocks and equity mutual funds accounted for just 17% of the wealth of high earners, 6% of middle earners and 2% of low earners. I would suspect that the numbers are somewhat higher today, but the point is still the same.

Far more important is the value of housing – which has recovered much less dramatically than the stock market. A large portion of Americans’ net worth is

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