Baby boomers like to imagine their glowing prospects: Revolutionary solutions to aging, second and third careers, cruises, limitless possibilities. This generation of 78 million contains an abundance of beautiful dreams -- and wishful thinking.
Among the fantasies is the Great Boomer Inheritance. Almost as beloved as tales of boomers' disposable incomes are the theories about how they will spend the vast wealth they stand to inherit -- $41 trillion, by some media accounts -- to feather their post-retirement years.
Tickets to Margaritaville anyone? Double lattes on the house?
This would be splendid, of course, if it were true. Especially for the 27 percent of the generation with household incomes of less than $35,000 a year, those baby boomers more usually called the "working poor."
Many of the boomers' parents aren't exactly wealthy, either. According to a 2006 study by the AARP, most boomers won't receive any inheritance at all. If they do, it's unlikely to make a "significant contribution" to their retirement savings.
"Our concern is that the baby boomers are going to be increasingly at risk in retirement. Life gets a lot tougher and I think the notion that inheritance is going to bail them out is not correct," says economist Alicia Munnell, head of the Center for Retirement Research at Boston College. "Wealth in the economy is extremely skewed: A fraction of the top one percent of the population has all the wealth. Bequests are even more skewed."
And if there is an inheritance, she says, it may be divided among many heirs; boomers are a generation of siblings.
"What people expect the typical boomer to inherit is $20,000," she says. "That's not a life-changing number. And because it's the middle number, half will inherit less than that. Most wealth is held by the very, very rich. Even if you have wealth at 65, you will probably use up a lot of it over the course of your retirement and your final estate will not be that big."
Boomers' parents will spend much of their savings paying for the medical conditions and illnesses that accompany their longer lives.
"It's important to realize that inheritances can be negative," says Joe Gribbin, a professor at the Erick
son School of Aging Studies. "We're talking about the syndrome of children who end up supporting their parents. If the debts for nursing-home care and other things are significant, those debts can wipe out all their parents' savings, and then more."
Felicia French, an administrator with the Maryland Department of Aging and a baby boomer, has already seen plenty of evidence of boomers supporting parents. She also knows retirees who are taking care of their parents.
"Some people are depleting their savings to take care of loved ones," she says. "I hear from people who are taking care of Mom, Dad or their last remaining older relative. ... If a family member moves in because of health issues, you're not going to be sitting on a lump of cash like you used to. Some people go to their graves still caring for folks."
As the state's manager for the National Family Caregiver support program, French says retirement savings evaporate with family crises.
"There are over 13,000 grandparent-headed households in Baltimore City," she says. "Some folks may be saving for that big retirement trip or the car
they've always wanted, but if grandbaby junior comes into the household, there goes the car, there goes the trip, there goes the money.
"A lot of different scenarios are playing out in people's lives after retirement. I know someone who's taking care of a spouse who's ill as well as two or three grandchildren. There are folks who have been retired for five to 10 years and have had to go back to work for whatever reason.
One is her own mother, Georgia French, who retired from Chrysler Corp. 10 years ago. The 72-year-old woman is looking for work near her home in Atlanta because her savings were not sufficient to support her, especially after the corporation adjusted her pension.
Joe Gribbin, who has worked as an associate commissioner at the Social Security Administration, says many retirees are shocked to discover their monthly checks aren't larger. What is more, 20 percent of current beneficiaries receive all of their income from Social Security, while another 13 percent count on it to provide 90 percent.
"Two-thirds of all beneficiaries get at least half of their income from Social Security," he says.
Those figures just don't register in some boomer circles. Industrial psychologist Wendy Kaufman, owner of Balancing Life's Issues, Inc. in Westchester County, N.Y., says many of her boomer clients continue to receive money from their parents to help buy homes and recover from divorces.
"Then one day the parents make the phone call, usually ignited by an illness, to say 'We can't do it anymore. Our health coverage isn't going to pay for it all. We can't do it anymore, honey, because we need the money.'
"It's shocking for many boomers to imagine a role reversal, that they're the ones to take care of their parents, because many times they're still living off them," she says.
Meanwhile, there's been a significant increase in the employment of men aged 65 and older, according to Munnell of the Center for Retirement Research.
"A larger percentage of folks are saying, 'I'm just going to have to work for a long time," she says. "For the past 10 to 15 years, people have said 'I'm going to work until I'm 65.' Yet the average retirement age is 62. Maybe the boomers will actually stay in the work force longer, which would help their retirement enormously, or maybe they'll get caught by the same forces: You hit your 60s, you get a little bit tired, some new manager makes a ruling you find repugnant, and you say 'I'm out of here!'"
Now 47, Felicia French is re-evaluating her own retirement plan. The Great Boomer Inheritance is not part of it, but long-term care insurance may be.
"I'm diabetic and asthmatic -- and I'm still trying to figure out when a good time to retire might be. I may want to work past 70," she says. "And as far as sitting back and cruising around in your little catamaran? Those days are over for a lot of folks."