{"id":179022,"date":"2025-09-30T02:58:17","date_gmt":"2025-09-30T02:58:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/179022\/"},"modified":"2025-09-30T02:58:17","modified_gmt":"2025-09-30T02:58:17","slug":"meet-the-rich-retired-boomers-who-are-now-ultra-frugal-because-they-are-scared-of-going-broke","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/179022\/","title":{"rendered":"Meet the rich retired boomers who are now ultra-frugal because they are scared of going broke"},"content":{"rendered":"

It\u2019s not just Gen Z who can\u2019t afford<\/a> the cost of living right now. Even wealthy boomers who have retired with at least six figures in savings are feeling the pinch.<\/p>\n

That\u2019s according to a study from Prudential Financial<\/a>. The Fortune 500 investment, money management, and retirement planning firm\u00a0surveyed around 20,000 people over the age of 50 and found retirees are living well below their means.<\/p>\n

Married 65-year-olds with at least $100,000 in financial assets withdrew an average of 2.1% of their savings annually\u2014that is, nearly half the usual spending rate of retirees, according to the research<\/a>.<\/a><\/p>\n

David Blanchett, head of retirement research at PGIM DC Solutions, an affiliate of Prudential Financial and coauthor of the study, told the <\/a>Wall Street Journal<\/a> that since 1926, retirees have been able to spend 4% of their savings per annum without risking running out of money in the last 30 years of their lives.<\/p>\n

But now, the prospect of living to upwards of 95 years old is becoming an increasingly likely reality for older people\u2014and you can bet the cost of housing, health care, bills, and food is going to go up in that time.<\/p>\n

It\u2019s why instead of splashing out on those golden years with trips around the world on a cruise, spending below one\u2019s means has become prevalent especially among wealthier retirees, the survey concluded.\u00a0<\/p>\n

Retirees feel unprepared for the jobless years\u2014a \u2018consumption puzzle\u2019<\/p>\n

Researchers are calling the trend the retirement consumption puzzle.\u00a0<\/p>\n

Essentially, even after grinding and gathering wealth for decades, retirees feel unprepared for the jobless years looming ahead and continue to squirrel away what money they have instead of finally enjoying it.<\/p>\n

One paper<\/a> bluntly concluded that \u201cindividuals do not plan rationally for an expected reduction in income at retirement.\u201d<\/p>\n

It bucks the general assumption that boomers\u2014who hold more than half of America\u2019s wealth<\/a>\u2014are kicking back their feet and enjoying a comfortable retirement in their mortgage-free McMansions.<\/p>\n

In reality, according to\u00a0Federal Reserve data,<\/a>\u00a0fewer than half of all boomers have saved enough for retirement, and worryingly, 43% of 55- to 64-year-olds had no retirement\u00a0savings at all in 2022. That year, 30% of people over 65 were economically insecure and made less than $27,180.<\/p>\n

It\u2019s no wonder that many are actually going back to work to live out their retirement dreams.<\/p>\n

The new retirement is no retirement<\/p>\n

\u201cUnretiring\u201d has become a global phenomenom. In the U.K., nearly 20% of baby boomers and late Gen Xers<\/a> are rejoining the workforce\u2014or planning to. Meanwhile, the number of those who have continued to work past 65 in the U.S. has quadrupled since the 1980s<\/a>, according to the Pew Research Center.\u00a0<\/p>\n

Now almost 20% of Americans 65 and older are employed<\/a>, nearly double the share of those who were working 35 years ago. In total, there are around 11 million Americans 65 or older who are working today, accounting for 7% of all wages and salaries paid by U.S. employers. In 1987, they made up 2%.<\/p>\n

Many blame being unable to afford the retired life they dreamed of<\/a>\u2014and by that, they aren\u2019t talking about buying a beach house to live out the rest of their years sipping on cocktails in the sun. They mean attaining the lowest level of minimum financial certainty to meet their changing needs as they age. So instead of puttering around the house, they are working for longer to grow their pension pot, or taking up part-time gigs to sustain a better standard of life. <\/p>\n

And the problem is bound to get worse as Gen Xers, the next generation of retirees, are currently struggling to stave off financial insecurity<\/a>\u2014let alone save for a cushy retirement.\u00a0<\/p>\n

A version of this story originally published on Fortune.com<\/a> on December 31, 2024.<\/p>\n

More on retirement:<\/p>\n

Fortune Global Forum returns Oct. 26\u201327, 2025 in Riyadh. CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of business. Apply for an invitation.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"It\u2019s not just Gen Z who can\u2019t afford the cost of living right now. Even wealthy boomers who…\n","protected":false},"author":2,"featured_media":179023,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[12343,64,63,8197,99,8779,186,6070,5465,184,185,1793],"class_list":{"0":"post-179022","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-american-workers","9":"tag-au","10":"tag-australia","11":"tag-baby-boomers","12":"tag-business","13":"tag-careers","14":"tag-finance","15":"tag-gen-x","16":"tag-inflation","17":"tag-personal-finance","18":"tag-personalfinance","19":"tag-retirement"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/179022","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=179022"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/179022\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/179023"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=179022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=179022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=179022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}