Baby Boomers are nearing retirement, if they haven’t already crossed that threshold. For many members of this generation, those golden years look far less golden than expected. Too many Boomers are making decisions right now that could create serious financial problems down the road, and the data tells a sobering story.
Here are three ways Boomers are setting themselves up for a painful retirement.
1. Their work plans aren’t realistic
One of the most damaging miscalculations Boomers make is assuming they can simply work longer to close any savings gap. According to the Transamerica Center for Retirement Studies’ 25th Annual Retirement Survey, released in June 2025, 57% of Boomer workers expect to retire at age 70 or older, or do not plan to retire at all. That sounds like a reasonable cushion, but the actual numbers tell a different story.
Data from the Center for Retirement Research at Boston College puts the average retirement age at 65 for men and 63 for women. People stop working far earlier than they plan, often because health problems, disability, or caregiving obligations force the issue. Nationwide, roughly 31% retire earlier than planned due to health issues alone. A Boomer banking on a decade of additional earnings to fund retirement could find that runway suddenly cut short, leaving a nest egg that was not ready to support two or more decades of withdrawals.
The Transamerica survey underscores just how acute this vulnerability is. Fewer than four in 10 Boomer workers have contingency plans in the event of unexpected job loss or a health crisis, meaning most have no fallback if their extended career plan unravels.
2. They’re planning to over-rely on Social Security
Social Security was never designed to be a full income replacement, and Boomers who treat it as one are in for a rude awakening. The Transamerica 25th Annual Survey found that 39% of Boomers expect Social Security to be their primary source of retirement income. The Social Security Administration itself says the program is designed to replace roughly 40% of pre-retirement income for the average worker, and that figure falls even shorter for higher earners.
The math got harder in 2026. The 2.8% Cost of Living Adjustment (COLA) added around $56 per month to the average Social Security check, but that raise was largely absorbed by a nearly 9.7% jump in Medicare Part B premiums, which rose to $202.90 per month. According to research from the Center for Retirement Research at Boston College, that Part B increase will eat up more than a quarter of the COLA for most beneficiaries. The same research notes that Part B premiums as a share of the average Social Security benefit will reach an all-time high of 9.4% in 2026, the third consecutive year that Medicare premium growth has outpaced the COLA.
There is a partial offset available. The One Big Beautiful Bill Act, signed into law on July 4, 2025, created a new senior bonus deduction worth up to $6,000 per person ($12,000 for married couples when both spouses qualify) for taxpayers age 65 and older. The IRS confirms this deduction applies to tax years 2025 through 2028 and phases out for single filers with modified adjusted gross income above $75,000 and joint filers above $150,000. By lowering taxable income, it can help some Boomers reduce the portion of their Social Security benefits subject to federal tax. Even so, without a pension or substantial personal savings, Social Security alone cannot sustain a comfortable standard of living.
3. They aren’t saving enough
The savings picture is the most troubling piece of the puzzle. According to Federal Reserve Survey of Consumer Finances data compiled by NerdWallet, the median household retirement savings for Americans aged 55 to 64 is approximately $185,000, while households headed by someone at or near retirement age hold a median of around $200,000. Fidelity’s Q4 2025 analysis of 24.8 million 401(k) participants found that Boomers carried an average 401(k) balance of $270,800. The more current Q2 2026 Fidelity data puts that average at $260,300, a dip reflecting early-year market volatility. Either way, averages are skewed sharply upward by wealthier savers. The median tells a harder truth.
Using the traditional 4% withdrawal guideline, a $185,000 nest egg generates roughly $7,400 per year in retirement income, or about $617 per month. Many financial planners now advocate a more conservative 3.7% withdrawal rate for new retirees to reduce the risk of depleting accounts too quickly in a volatile market environment. At that rate, the same $185,000 produces just under $6,850 annually. That figure, combined with a typical Social Security benefit, still falls well short of meeting most retirees’ actual spending needs.
The risks do not stop at the account balance. Northwestern Mutual research found that roughly 40% of Boomers say it is at least somewhat likely they will outlive their savings. Boomers who are behind have limited but real options: delaying retirement even by a year or two can improve outcomes significantly, and catch-up contributions to a 401(k) allow savers aged 60 to 63 to contribute up to $35,750 in 2026 under the SECURE 2.0 “super catch-up” rules. Diversifying into assets with lower correlation to equity markets can also reduce the damage a downturn inflicts in the critical early years of retirement. The window to act is narrow, but it is still open.
Editor’s note: This article was updated to reflect the June 2025 Transamerica Center for Retirement Studies 25th Annual Retirement Survey, which revised the share of Boomers planning to work past 70 or never retire from 56% to 57%, and the share expecting Social Security as their primary income source from 43% to 39%. Fidelity’s more recent Q2 2026 data showing a Boomer average 401(k) balance of $260,300 was also added alongside the Q4 2025 figure of $270,800, and new context was included on the lack of contingency planning among Boomers facing unexpected job or health setbacks.
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