As many Baby Boomers approach traditional retirement age, they’ve had plenty of time to watch their parents’ generation enjoy the golden years in style—with ample travel and leisure and a minimum of financial worries. Many boomers assumed their retirements would be just as good, if not better than the previous generation. But increasingly, it looks like that’s just not going to happen.
It wasn’t supposed to be like this. The prototypical Baby Boomer was supposed to be able to retire by his early or mid-60s, and then embark on a carefree, fun existence filled with round-the-world cruises, beachfront Florida condos and abundant spoiling of grandchildren.
In the post-recession era, however, after portfolio values tanked, the real estate market collapsed, and jobs disappeared en masse, the “golden years” concept increasingly seems like a tease. In a survey from this past spring, 54% of American workers said they planned to just keep working upon reaching retirement age, and 39% said they wouldn’t retire until age 70 or older. And the reason most often cited for continuing to work past the traditional retirement age? Simply put: necessity.
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The past decade has been brutal on boomers, forcing many to drop their rose-colored assumptions about what retirement would be like, according to a Denver Post story:
The decline of pensions, longer lifespans, higher debt and lower savings rates — combined with battered 401(k)s from two recessions in the past decade and the devastating impact on jobs and housing in the most recent downturn — have combined to radically alter the reality of retirement for boomers.
In one survey cited in the Denver Post story, 35% of boomers said they were “totally unprepared” for retirement, and half were worried that they’d outlive their savings.
Speaking of which, how much savings does one need to retire comfortably nowadays?
There are many ways to calculate “The Number”—the amount one needs to save in order to retire in style—but to paraphrase a Bloomberg story, it’s increasingly looking like most people are underestimating how much they need. The reason is that, traditionally, investors could expect an annualized long-term rate of return of 8%. Because stocks and bonds don’t appear particularly promising in the decade or so ahead, however, a more realistic rate of return might be 6%—which after inflation could be less than 3%.
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All of which means that The Number one needs to save today is much, much bigger (even after adjusting for inflation) than The Number needed to retire comfortably a decade or two ago. Increasingly, your 60s and 70s may not be quite so “golden.” They’re actually looking like more of the old grind.
Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.