Baby boomers face more risks to their retirement than previous generations 

  • These generation members hold less wealth, are deeper in debt and will face higher expenses than retirees a decade older than them, according to a new report by the Stanford Center on Longevity.
  • "Boomers who run out of funds towards the end of life will either fall back on children, who by then will be in their 50s and 60s, or the social safety network," said Jialu Streeter, a research scientist at Stanford.
Retiring baby boomers will more than double Medicare and Medicaid costs by 2020, according to industry data.
Thomas M. Barwick | Getty Images
Retiring baby boomers will more than double Medicare and Medicaid costs by 2020, according to industry data.

Many baby boomers are headed for an uncertain retirement.

These generation members hold less wealth, are deeper in debt and will face higher expenses than retirees a decade older than them, according to a new report by the Stanford Center on Longevity.

Nearly one-third of baby boomers had no money saved in retirement plans in 2014, when they were on average 58 years old, according to the researchers. (They analyzed data at various ages using multiple nationally representative surveys.)

Among boomers with positive balances, the median savings was around $200,000. Experts have said people may need a nest egg of more than $1 million to carry them through a 30-year retirement.

There are currently more than 70 million baby boomers — the generation defined by people born between 1946 and 1964 — in the United States, according to the Pew Research Center.

That many people could exit the workforce unprepared, the researchers note, could have profound consequences for the well-being of these individuals and society. "Boomers who run out of funds towards the end of life will either fall back on children, who by then will be in their 50s and 60s, or the social safety network," said Jialu Streeter, a research scientist at Stanford.

Baby boomers are likely to face old age not just with less money in savings, but with more expenses than prior generations, too.

The average out-of-pocket health-care spending by people with Medicare was more than 40 percent of the average Social Security income in 2013, according to the Kaiser Family Foundation.

Debt is yet another problem for baby boomers. On average, they're more than $110,000 in the red, a burden more than 50 percent higher than the amount carried by people born in the 1930s.

One-third of homeowners over the age of 65 were still paying off a mortgage in 2012, compared with less than a quarter of people in 1998 — and the median amount they owed nearly doubled to $82,000 from $44,000.

Meanwhile, the number of people aged 60 and older with student debt quadrupled between 2005 and 2015, to 2.8 million from 700,000.

Increased debt levers and expenses coupled with less savings will make it hard for baby boomers to leave work at 65 and maintain their pre-retirement standard of living, the researchers note.

"They may need to consider working longer, reduce their standard of living, and make smart choices regarding Social Security and deploying their savings in retirement," Streeter said.

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