Why Half of Boomers Miss Retirement Goals and How to Fix It

Picture this: you’re sitting at your kitchen table, a cup of coffee gone cold, staring at a spreadsheet that just doesn’t add up. Retirement is looming, and the numbers aren’t what you hoped. According to recent research, half of Baby Boomers—those born between 1946 and the early 1960s—are in this exact spot, facing a retirement savings shortfall. It’s a sobering reality, but it’s not the end of the story. There’s still time to shift gears, make smarter choices, and secure the future you’ve been dreaming of.

The idea of falling short in retirement can feel like a punch to the gut, especially when you’ve worked hard for decades. But the good news? There are practical, actionable steps you can take to bridge that gap. In my experience, it’s often the small, deliberate changes that make the biggest difference. Let’s dive into why so many Boomers are off track and explore three powerful strategies to get your retirement plans back on solid ground.

The Retirement Crisis Facing Baby Boomers

Recent studies paint a stark picture: only about 51% of Baby Boomers are financially prepared for the retirement lifestyle they want. That leaves nearly half staring down the barrel of a future where their savings won’t stretch far enough. Why is this happening? For starters, many Boomers are grappling with a shift in pension schemes that’s left them more reliant on unpredictable investments than their parents were.

Back in the day, defined benefit pensions were the gold standard. These plans guaranteed a steady income in retirement, like a financial safety net. Fast forward to today, and most Boomers are navigating defined contribution pensions, where the payout depends on stock market performance and personal contributions. It’s a riskier game, and not everyone’s winning.

“The shift from defined benefit to defined contribution pensions has left many Boomers vulnerable to market swings and inadequate savings.”

– Financial planning expert

Data shows that 69% of Boomers with a defined benefit pension are on track for their retirement goals, compared to just 28% of those relying solely on defined contribution plans or the state pension. That’s a massive gap. And for middle-income Boomers—those earning between £17,700 and £46,599—the risk is even higher. They’re caught in a tricky spot, often too wealthy to lean heavily on state pensions but not wealthy enough to coast into a comfortable retirement.

So, what’s the deal with these income brackets? Let’s break it down. Retirement goals come in two flavors: relative and absolute. A relative goal is about replacing a percentage of your pre-retirement income, while an absolute goal focuses on hitting a specific living standard, measured in pounds. Middle-income Boomers often miss both targets, while low-income folks might hit their relative goal thanks to the state pension but still fall short of a minimum living standard.

Understanding Retirement Income Goals

Let’s get specific. How much income do you need to maintain your lifestyle in retirement? Experts use something called the income replacement rate to figure this out. It’s the percentage of your pre-retirement earnings you’ll need to live comfortably. The numbers vary by income level, and they’re eye-opening.

Take a moment to let that sink in. If you’re earning £32,600 a year, you’ll need 72% of that—about £23,472 annually—to keep your lifestyle afloat in retirement. Sounds doable, right? But for many, especially those without a defined benefit pension, hitting that target feels like climbing Everest in flip-flops.

Then there’s the absolute measure, which looks at what you need for a specific standard of living. Think of it as the bare minimum to cover essentials like food, housing, and a bit of fun. For middle-income Boomers, even this baseline can be out of reach without careful planning.

Why Middle-Income Boomers Are Hit Hardest

If you’re a middle-income earner, you’re in a weird spot. You’re not scraping by, but you’re not rolling in it either. The state pension helps, but it’s often not enough to cover the gap between your savings and your goals. High-income Boomers? They’ve usually got enough stashed away to weather most storms. Low-income folks lean heavily on the state pension, which can meet their relative goals, even if it’s not luxurious. But middle-income Boomers? They’re stuck in the middle, and it’s not a great place to be.

Here’s the kicker: many middle-income Boomers didn’t start saving early enough, or they underestimated how much they’d need. Life happens—kids, mortgages, unexpected expenses—and suddenly, retirement is knocking, and the piggy bank’s looking a little light. But don’t panic. There are ways to turn this around.

Three Practical Steps to Boost Your Retirement Savings

Feeling a bit overwhelmed? I get it. Planning for retirement can feel like trying to solve a Rubik’s Cube in the dark. But here’s the thing: you don’t need to overhaul your entire life to make a difference. These three strategies can help you close the retirement savings gap and get you back on track.

1. Delay Retirement or Ease Into It

Let’s be real—retirement doesn’t have to mean quitting work cold turkey. One of the most effective ways to boost your savings is to keep earning for a bit longer. Delaying retirement by even a couple of years can make a huge difference. Not only do you keep adding to your pension pot, but you also give your investments more time to grow.

Another option? Take a phased retirement. Maybe you cut back to part-time work or pick up a side gig that you actually enjoy. I’ve seen friends take this route, and it’s like a financial and emotional win-win. You stay active, keep some income flowing, and give your savings a chance to catch up.

• Work a few extra years to boost pension contributions.
• Consider part-time roles to ease into retirement.
• Use the extra time to let investments grow.

2. Tap Into Your Home Equity

For many Boomers, their home is their biggest asset. With property values climbing over the years, your house could be a goldmine waiting to be tapped. I’m not saying you need to sell your dream home, but there are smart ways to use your home equity to fund retirement.

One option is downsizing. Moving to a smaller place or a less expensive area can free up a chunk of cash. Another route is equity release, where you borrow against your home’s value while still living in it. It’s not for everyone, but it can be a game-changer if you’re facing a serious shortfall.

“Your home could be the key to unlocking a more secure retirement. It’s about making your assets work for you.”

– Wealth management advisor

Before jumping in, talk to a financial advisor. Equity release can come with risks, like interest piling up over time. But for many, it’s a lifeline that turns a stressful retirement into a comfortable one.

3. Rethink Your Spending Goals

Here’s a question to ponder: do you really need as much as you think in retirement? Studies show that many retirees spend less than they expect, especially as they settle into a slower pace of life. Trimming your spending goals by even 10% could make a massive difference in your retirement readiness.

Maybe you don’t need that annual trip to the Maldives, or perhaps you can swap fine dining for cozy home-cooked meals. I’m not saying give up everything you love—just take a hard look at what’s essential. In my experience, the happiest retirees are the ones who prioritize experiences over stuff.

1. Review your current spending habits and identify areas to cut back.
2. Set realistic retirement goals based on your unique needs.
3. Focus on meaningful experiences rather than expensive luxuries.

The Role of Defined Benefit vs. Defined Contribution

Let’s circle back to pensions for a second. The difference between defined benefit and defined contribution plans is like night and day. If you’re lucky enough to have a defined benefit pension, you’re in a much stronger position. These plans provide a guaranteed income, often tied to your salary and years of service. For Boomers with these pensions, they make up about half of their projected retirement income.

Defined contribution plans, on the other hand, are more like a financial rollercoaster. Your payout depends on how much you’ve saved and how the market performs. If the stock market tanks, so could your retirement dreams. That’s why only 28% of Boomers without a defined benefit plan are on track for their goals.

Retirement Income Breakdown:
  Defined Benefit: ~50% of income (for those who have it)
  Defined Contribution: Market-dependent, higher risk
  State Pension: Safety net, but often not enough

If you’re relying on a defined contribution plan, don’t despair. The strategies we’ve discussed—delaying retirement, tapping home equity, and adjusting spending—can help you make the most of what you’ve got.

What If You’re Already Retired?

Maybe you’re reading this and thinking, “Great, but I’m already retired—what now?” Don’t worry, it’s not too late. If you’re facing a shortfall, consider part-time work to supplement your income. Even a few hours a week can ease the pressure. And don’t overlook your home equity—it’s never too late to downsize or explore equity release.

Another tip? Revisit your budget. Small tweaks, like cutting subscriptions you don’t use or shopping smarter, can stretch your pension further. I’ve seen retirees transform their financial outlook just by getting creative with their spending.

Planning for the Long Haul

Retirement isn’t just about money—it’s about peace of mind. The thought of running out of cash in your 80s is enough to keep anyone up at night. But by taking action now, you can build a financial cushion that lets you enjoy your golden years without constant worry.

Start by assessing where you stand. Look at your pension, savings, and other assets. Then, map out your goals—both the lifestyle you want and the income you’ll need to get there. From there, use the strategies we’ve covered to close any gaps. It’s not about being perfect; it’s about being proactive.

“The best time to start planning for retirement was yesterday. The second-best time is now.”

– Personal finance advisor

Perhaps the most interesting aspect of all this is how much control you still have. Life might’ve thrown you curveballs, but you’re not out of the game. Whether it’s working a bit longer, unlocking your home’s value, or rethinking your spending, these steps can turn a shaky retirement into a secure one.

So, what’s your next move? Maybe it’s time to sit down with a financial advisor or have an honest chat with yourself about your priorities. Whatever you choose, don’t wait. Your future self will thank you.