Boomer Retirement Reality Check: Numbers Look Bleak (What to Do)

An older couple stand arm in arm on a beach and watch the sunset.

(Image credit: Getty Images)

By Neale Godfrey, Financial Literacy Expert

published 28 September 2025

If you're a Baby Boomer (born from 1946 to 1964), you've probably noticed two things:

Retirement for you doesn't look like it did for your parents
Prices are rising faster than your investment statements

Lurking in the back of your mind is a question that wakes you up at 3 a.m.: "Will I run out of money before I run out of breath?"

The numbers look bleak

According to a report by the Seniorly Resource Center, a huge crisis lurks for many older people. They found that older adults in 41 states and Washington, D.C., will outlive their money, facing an average shortfall of $115,000.

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This translates into almost half of American households running short of money in retirement if they stop working at age 65.

This gap comes from older adults spending more than they're likely to bring in from Social Security, savings and investments. The highest groups at risk include women, Black and Hispanic retirees and single people.

Most Boomers didn't count on the surge in costs of living, health care and food, to name a few expenses. They're living on fixed incomes and conservatively invested retirement plans.

The most daunting problem is that the cost of medical care continues to increase at alarming rates.

Fidelity Investments, in its annual Retiree Health Care Cost Estimate, revealed that a 65-year-old who retires in 2025 can expect to spend an average of $172,500 on health care and medical expenses during retirement. Multiply that by two for a couple.

What's concerning is that when the research looked at all generations, it showed that 1 in 5 Americans say they've never considered health care costs during retirement.

Is there a magic number to feel secure?

The simple answer is no. You must determine that for yourself and your circumstances. You don't know how long you'll live and what sort of health conditions you will face.

A 2025 study by Northwestern Mutual projected that Americans need $1.26 million to have a comfortable retirement.

Now what?

Here's how to determine how much money you'll need — and what to do if the math doesn't look pretty.

Step No. 1: Take an honest look at your retirement math.

Determining if you'll run out of money isn't mysterious — it's math.

Estimate your life expectancy. The average 65-year-old today can expect to live 20 to 25 more years. That's a long time for your nest egg to lay golden eggs.

Know your "burn rate." Add up all your monthly expenses — housing, food, health care, travel, taxes. Multiply by 12, then by the number of years you expect to live.

Compare that rate with your assets. This includes retirement accounts, pensions, Social Security, investments and savings.

If the expenses number is bigger than your assets number, you've got a problem.

Step No. 2: Factor in the silent budget killers.

Inflation. Even at an inflation rate of 3% a year, your costs will roughly double in 24 years.

Health care. Fidelity estimates a 65-year-old couple retiring today will need about $345,000 for health care.

Taxes. Uncle Sam is still invited to your retirement party (yes, you can only count on death and taxes).

Car insurance. You can research online ways to save on car insurance. A website like Insurify can help with that process.

Step No. 3: Make your money work as hard as you do.

Guaranteed income streams. Annuities, pensions or rental income can help cover essentials.

Bucket strategy. Keep two to three years of expenses in cash or short-term bonds and invest the rest for growth.

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Plan for required minimum distributions (RMDs). RMDs are the required distributions you must withdraw from tax-deferred retirement accounts every year, after a certain age, without facing an IRS penalty.

AARP has a calculator to help you figure this out so you don't get hit with a tax torpedo.

Be careful with spending on shopping/entertaining. Plan meals that you can also freeze for the future. Buy in bulk and shop with friends who can share the case of toilet paper. Plan potluck meals with friends and family.

Step No. 4: Protect yourself against the big unknowns.

Long-term care. Medicare doesn't cover long-term care. Long-term care insurance or a plan for paying for it privately is essential.

Estate planning. Wills, trusts and powers of attorney keep your assets (and your wishes) under control.

Fraud prevention. Older adults lose billions to scams every year. Set up safeguards now.

What happens if you're short of money

If your numbers aren't lining up, act now:

Delay Social Security. Each year you wait to claim Social Security benefits (up to age 70) boosts your check by about 8%.

Work longer or part-time. Extra years of income mean fewer years drawing from savings.

Take on a side hustle to earn extra money. Go online to get some ideas about how you can earn some extra money — some side hustles you can even do from home.

Trim the fat. Downsizing your home, selling a second car or reducing travel can stretch your money.

Rebalance investments. If an investing approach is too conservative, you risk not keeping up with inflation. If it's too aggressive, you risk big losses.

The bottom line

If you're a Boomer, your retirement reality is different from your parents'. They had pensions, lower medical costs and often died younger. You've got more years to enjoy — but also more years to fund.

The key is not to hope you'll make it, but to plan so you will. Consider running the numbers now and making changes before it's too late.

Your future self will thank you.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Neale Godfrey is a New York Times No. 1 bestselling author of 27 books that empower families (and their kids and grandkids) to take charge of their financial lives. Godfrey started her journey with The Chase Manhattan Bank, joining as one of the first female executives, and later became president of The First Women's Bank and founder of The First Children's Bank. Neale pioneered the topic of "kids and money," which took off after her 13 appearances on The Oprah Winfrey Show.