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How baby boomers can close a retirement savings gap

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9 months ago

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Many baby boomers aren’t on track to retire with enough money. They have some options to adjust their trajectory, researchers said, but these come with trade-offs.

Just 40% of workers who are age 61 to 65 — the youngest members of the boomer cohort — are financially on track for retirement, according to recent research from Vanguard, an asset manager and retirement plan administrator. That group will have enough income to fund their current lifestyle into retirement, researchers estimate.

The rest are expected to fall short. The typical — or, median — 61- to 65-year-old will have a $9,000 annual deficit in retirement, representing a 24% shortfall in their funding needs, Vanguard estimates.

Its analysis assumes people retire and claim Social Security at age 65.

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The findings come as a historic demographic shift, known as “peak 65,” is underway in the U.S. A record number of people — more than 4 million a year, or about 11,000 a day — are expected to turn 65 annually from 2024 to 2027.

Of course, knowing the “right” amount of money needed to retire is an impossibility. No one knows how long they will live or how much money they might need for future retirement expenses, such as health care or long-term care.

Yet boomers who suspect they won’t be able to sustain their current standard of living are in a tough spot compared to younger generations.

Gen Z and millennials, for example, have decades to change course, perhaps by saving more for retirement and earning compound interest on those balances. Not so for near-retirees.

Compared to younger investors, boomers also generally hold fewer stocks — the typical growth engine of a retirement portfolio — to insulate their savings from market risk as they prepare to begin retirement withdrawals.

There may be negative implications for the U.S. economy if many boomers are ill-prepared for retirement and are forced to cut spending to make their nest eggs last.

“Some economists sound alarm bells: ‘We have this [retirement] crisis, it’s doom and gloom,'” said David Blanchett, a certified financial planner and head of retirement research at PGIM, an investment manager. “It’s not nearly as bad as it seems.”

Boomers do have a few options to help close any retirement-readiness gap. However, the options may not be accessible or palatable to all households, he said.

Here are three of them.

1. Working longer is a ‘silver bullet’

Nastasic | E+ | Getty Images

Delaying retirement is a “silver bullet” when it comes to eliminating or shrinking a retirement funding gap, Blanchett said.

“Even pushing back retirement back a few years can do wonders for retirement outcomes,” he said.

That’s because working longer would yield more career-funded savings, higher Social Security income for life due to delayed claiming, and fewer years of retirement to fund, according to Vanguard’s report.

For example, working two years longer — e.g., retiring and claiming Social Security benefits at age 67 — would increase the share of 61- to 65-year-olds who are prepared for retirement to 47% from 40%, Vanguard found.

However, not everyone will be able to work longer, even if this is something they plan to do.

“It’s not an option that’s available for all,” said Kelly Hahn, head of retirement research in Vanguard’s Investment Strategy Group.

In 2025, 40% of retirees said they left the workforce earlier than planned, according to the Employee Benefit Research Institute’s Retirement Confidence Survey. That share has been roughly similar for the past two decades, hovering around 40% to 50%.

Some of the reasons for an unexpectedly early exit include health problems and layoffs.

2. Address the ‘tricky topic’ of home equity

A “For Sale” sign in front of a home in Crockett, California, US, on Wednesday, Nov. 12, 2025.

David Paul Morris | Bloomberg | Getty Images

Among the reasons for boomers’ somewhat precarious financial position relative to younger generations: The workplace retirement system shifted from a pension-heavy system to a 401(k)-type system, right as young boomers were in their peak earning years, Hahn said.

“They didn’t really benefit fully from the pensions their parents or grandparents may have had,” or from the newer 401(k)-type system of savings, she said.

However, the bulk are sitting on a large non-liquid asset, Hahn said: their homes.

The vast majority — 86% — of baby boomers own homes, a much larger share than younger generations, according to Vanguard calculations based on the Federal Reserve’s most recent Survey of Consumer Finances.

The average boomer has $113,000 of home equity, according to Vanguard’s report.

Tapping into that equity would increase the share of young boomers financially prepared for retirement to 60%, up from the baseline 40%, researchers estimated.

It's a big premium for homeowners to move right now, says Invitation Homes CEO Dallas Tanner

There are many ways to access those funds, experts said.

“The one that will give you the biggest bang for your buck from a quantitative standpoint” is selling one’s home outright and becoming a renter instead of a homeowner, Hahn said.

Homeowners might also consider selling their current home and downsizing, moving to a lower-cost area, or borrowing against their home equity via a reverse mortgage or a home equity line of credit.

However, tapping home equity is often a “tricky topic,” Hahn said.

Most people are reluctant to turn to their home as a piggy bank, viewing it instead as an asset of last resort, Blanchett said.

“The home is the largest tangible asset for most Americans,” he said. “It’s a viable option in theory, but in the past it’s been relatively unpopular.”

Even pushing back retirement back a few years can do wonders for retirement outcomes.

David Blanchett

certified financial planner and head of retirement research at PGIM

A home generally comes with a strong emotional attachment to one’s identity, potentially making it difficult to sell, Hahn said.

Homeowners with a mortgage who secured their loan when rates were low may also feel locked in, given higher interest rates now, she said.

Additionally, accessing home equity via a reverse mortgage or HELOC can also be costly and time-consuming, Blanchett said. Homeowners need to get approved for the loan, which often comes with implicit or explicit costs, he said.

Social connectivity is also a “very important aspect of a happy retirement,” Blanchett said. Retirees would have to weigh the loss of their community and social network against the financial necessity of relocating, he said.

3. Spend less

Of course, people might also consider spending less both before and during retirement, Blanchett said.

Saving more money toward the tail end of one’s working years can help accomplish that goal by forcing households to live on reduced cash flow, he said.

The typical retiree experiences a 20% decline in their consumption when they enter retirement, perhaps because a lack of savings causes a reduction in their spending, according to Blanchett’s research.

However, data suggests about 90% are moderately or very satisfied with their retirement, he said.

“These responses strongly suggest that despite perceptions of a retirement crisis, retirees are relatively content,” he wrote.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

Published

2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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