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The Baby Boomer Retirement Crunch Begins

Emily Brandon

The oldest baby boomers have already turned 65, and the older population of the U.S. is beginning to swell. The age-65-and-older population grew 18 percent between 2000 and 2011 to 41.4 million senior citizens, according to a recent Administration on Aging report. And these numbers are expected to further balloon over the coming decade as baby boomers continue to reach traditional retirement age. Here's what retirement looks like for the typical person age 65 or older in the U.S.:

[See: The 10 Fastest-Aging States.]

Low incomes. Most retirees have very modest incomes. The median income for people age 65 and older was $27,707 for males and $15,362 for females in 2011. The typical household headed by someone age 65 or older had a median income of $48,538. The median income increased by 2 percent between 2010 and 2011 after adjusting for inflation. Almost 3.6 million elderly people (8.7 percent) lived below the poverty level in 2011.

Reliance on Social Security. The most common source of retirement income is Social Security, and 86 percent of people age 65 and older receive monthly payments. And Social Security is responsible for 90 percent or more of the income received by 36 percent of beneficiaries. Only about half (52 percent) of retirees receive income from their assets. Even fewer retirees receive monthly payments from private (27 percent) or government (15 percent) pensions. "The boomers will be the first generation to overwhelmingly not receive some sort of guaranteed benefits from employers," says Ken Dychtwald, president of the consulting firm Age Wave and author of "A New Purpose: Redefining Money, Family, Work, Retirement, and Success." "We now live in a 401(k) world where people are responsible for our own savings, and baby boomers have not done a very good job. It's a generation that is going to struggle in old age in the absence of reliable anchors and support systems."

[Read: 10 Ways Baby Boomers Will Reinvent Retirement.]

Continuing to work. A growing proportion of the older population is continuing to work during the traditional retirement years. Some 18.5 percent of Americans age 65 and older were in the labor force in 2012, according to the Bureau of Labor Statistics, including 24 percent of men and 14 percent of women. Young retirees between ages 65 and 69 are the most likely to be working. "For a lot of people, they literally need to work. Work has also increasingly become connected with the sense of the meaning of life and the purpose of life," says Marcie Pitt-Catsouphes, director of the Sloan Center on Aging and Work at Boston College. "The same person might have reasons from each of those categories."

Staying put. While many people fantasize about moving someplace sunnier or more interesting, most people retire where they spent the final years of their career. Between 2011 and 2012, only 3 percent of people age 65 and older moved, compared to 14 percent of people under 65. And most older movers stayed in the same state (83 percent) and the same county (61 percent). Only 16 percent of people who traded spaces after age 65 relocated out of state or abroad. Most senior citizens (81 percent) also reside in metropolitan areas. "We find increasing percentages of people living in urban areas as age increases," says Amy Symens Smith, chief of the age and special populations branch at the Census Bureau.

Making it to Medicare. The older population is much more likely to have health insurance coverage than younger counterparts. Almost all Americans (93 percent) age 65 and older were covered by Medicare in 2011. And 86 percent of retirees also have supplementary coverage that fills in some of the gaps and cost-sharing requirements of traditional Medicare.

[Read: States Where People Live the Longest.]

Longer retirement. The average life expectancy for people turning age 65 is an additional 20.4 years for women and 17.8 years for men. Older women significantly outnumber retired men. There are 23.4 million women age 65 and older, compared to 17.9 million older men. "Today people reach 65 and they think they are going to live to 85 or 90 or 100," Dychtwald says. "More and more people are getting wind of the idea that living a long life is not a certainty, but a strong likelihood."

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