401(k)s Come Up Short for Boomers

The retirement savings plans that many baby boomers hoped would support them through old age are not panning out in many cases. The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what it needs to maintain its standard of living in retirement, according to data compiled by the Federal Reserve. Data from other sources show that people planning to retire will not have the savings they expected—including Social Security and other pensions—and that the financial crisis has made things worse. Many people are already making sacrifices by postponing retirement, moving to cheaper housing, canceling travel plans, and cutting back on all manners of spending. Middle-income earners are in particularly dire straits, with 401(k)-type accounts representing the majority of their savings.