The Big Squeeze
The pressure is on baby boomers saving for retirement. Many also face college tuition and caring for a parent
These are folks like David and Kim Scofield. The Ocala, Fla., couple spent years working on commission as sales agents in the tile and flooring industry. Because they weren't on a fixed salary, though, saving a regular amount of money each year was always a challenge, says Kim, 48.
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Though she and husband, David, 53, always wanted to save 10 percent to 20 percent of their incomes, the reality is, they had less than $100,000 in their IRA s. "It's not very much money," she says. On top of that, they had amassed more than $25,000 in credit card debt.
Recently, the couple took a leap of faith and opened their own small business, which distributes tiles, matted rocks, and other flooring materials. Kim says the couple was able to more than double their income over the past year with the new business. As a result, they've been able to increase their IRA balances by more than 50 percent. But without a pension plan, the Scofields realize that they need to save more to make up for those lost years.
Kim says the couple plans to work well into their 60s, if not early 70s. Then, they may work part time while their son takes over the business. "We were in a situation, before the business, where we felt that we had to work the rest of our lives just to make ends meet," says Kim.
"We've been able to turn our finances around. But now, I'm having so much fun I don't even consider retiring." That may be just the attitude that young boomers need to make the new retirement model work.
65 percent of workers ages 45 to 54 say they're saving for retirement.
25 percent of workers ages 45 to 54 plan to retire at age 65, down from 39 percent just 10 years ago.
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