Failing at Retirement: 11 Mistakes Baby Boomers Are Making

6. They think Social Security is bulletproof

People have been wringing their hands about the future of Social Security for years, but the anxiety doesn’t seem to be filtering down to some boomers. Just 25% were aware by 2033, Social Security will probably only have enough money to pay out 75% of promised benefits to retirees.

Does that mean our government-run retirement system is on the verge of collapse? Not exactly. Younger workers are going to keep paying in to Social Security, and retirees will probably keep getting benefits. But unless changes are made, such as increasing the retirement age or raising the Social Security tax cap, some people could end up getting less in benefits than they expected.

If boomers are a bit fuzzy on Social Security specifics, they have some even bigger misconceptions about how 401(k)s work.

7. They’re worried about their 401(k) for the wrong reasons

There are some good reasons for boomers to be worried about their 401(k)s. For one, many don’t have enough saved in their tax-advantaged retirement account, meaning they’ll need to learn to live on less once they stop working. About 46% of boomers have less than $100,000 in their retirement account, a survey by PricewaterhouseCoopersfound. That’s a nest egg that will generate just a few hundred dollars a month in income, depending on how much you withdraw and your rate of return.

But it’s not low account balances that are keeping some boomers up at night. Instead, 25% of people surveyed are concerned if their company goes bankrupt, their 401(k) will be at risk. That’s not true. A company bankruptcy could jeopardize your pension, if you have one, but your 401(k) is yours no matter what happens to your employer. Your employer’s creditors can’t get at your retirement funds in your 401(k).

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