The Baby Boomers While personal savings are a key component of just about anyone's retirement plan, they may be particularly important for the baby boom generation, which begins reaching retirement age in the year 2012. Social Security will contribute proportionately less of this group's retirement income. Starting in the year 2000, the age at which full benefits are payable was raised for anyone born after 1937. For those born in 1960 or later, for example, the normal retirement age rose from 65 to 67. Even with these scheduled changes, there is concern as to whether Social Security will be able to provide baby boomers with the full benefits due them.
Today there are just over three workers paying taxes for every retiree receiving benefits.
Within 40 years, there will be only two workers per beneficiary. The trend in company retirement plans is also placing more responsibility for retirement planning on the individual. In recent years, companies have increasingly shifted from defined benefit pension plans, which guarantee workers a predetermined retirement income, to defined contribution plans, where the employer may match the employee's contributions to a tax-sheltered retirement plan. The plan's benefits will depend on how much the employee contributes and how successfully he or she invests the money in the plan. Individuals who change jobs frequently may be eligible for substantially less in corporate retirement benefits than those who have extended careers with one or two firms.