When I turned 55 years old back in 2009, I did a study to determine what the 80th percentile 55 year old household looked like financially, in general terms. I originally called the EBRI (Employee Benefit Research Institute) in Washington D.C. because I wanted to get a feel for how well prepared my cohort was for retirement. I was referred to an economist at the University of Chicago who heads up the Survey of Consumer Finances for the Federal Reserve Board. Not exactly the beginning of a movie script, but I struck up a very informative relationship with this individual who lived and breathed the financial reality of the American household.
What unfolded was an eye-opening effort to determine what it would take for the Baby Boomers to retire with a lifestyle befitting the upper middle class of one of the most prosperous societies in the history of the human race. After all, who could be so pessimistic as to forecast failure for the people who sit at the center of our most influential demographic age group? But the data on their current financial condition is, to say the least, daunting. And particularly now, at 57, they do not have much time to prepare.
There were three primary reasons why I chose the 80th percentile 55 (now 57) year old household. First, people in the 80th percentile have the where-with-all to change their behavior to adapt to changing financial goals. Second, I am 57 and I was curious about whom I was hanging out with. Finally, the people born in 1954 are practically at the center of the Baby Boom, which is defined as those born between 1946 and 1964.