14 Sep Retirement Readiness of Baby Boomers Creates Lack of Confidence
Retirement is a concern for baby boomers. Less than one-quarter of boomers say they are confident they have saved enough for retirement, and just over one-half report having any retirement savings at all, according to the results of a survey conducted by the Insured Retirement Institute (IRI).
The survey of 800 Americans aged 53 to 69, conducted February 9-11, 2016, found that just 24% of respondents are confident they will have enough savings to last throughout their retirement years. Researchers pointed out that this is the lowest level in the six years the IRI has been conducting this survey: in 2011, for example, 37% of the boomers polled expressed confidence that they had saved enough for retirement.
Overall, the results indicated that the baby boomers surveyed have very low levels of confidence in their financial readiness for retirement: just 22% said they believe they are doing a good job in preparing for retirement, only 27% said they are confident that their savings will be sufficient to cover health care costs in retirement, and just 16% said they are confident they can cover the cost of long-term care.
Of the baby boomers surveyed, 55% reported having retirement savings, and of those who indicated that they have savings, 42% said they have saved less than $100,000, 29% said they have saved between $100,000 and $250,000, and another 29% indicated they have saved more than $250,000.
The survey also showed that the respondents who reported that they lack confidence in their retirement security expressed some common regrets, with 68% saying they wish they had saved more, and 67% saying they wish they started saving earlier. By contrast, just 27% said they regret not having maximized their employer plan benefits.
The findings further indicated that significant shares of baby boomers are delaying retirement: 30% of respondents said they had postponed their plans to retire in the past year, and 59% said they now plan to retire at age 65 or older. Researchers observed that while just 17% of the baby boomers surveyed in 2011 said they plan to retire at age 70 or older, this figure had risen to 26% in the most recent survey.
When asked what they would do if they exhausted their financial resources in retirement, 71% of respondents said they would try to cut back to rely only on Social Security, 54% said they would try to return to work, 22% said they would rely on charity, and 19% said they would seek help from their children or other family members.
The findings also revealed that baby boomers are losing confidence that they will be able to leave an inheritance to their children: just 46% of respondents in the 2016 survey said they believe it is important to leave money to heirs, down from a high of 67% in 2013.
In addition, the survey found that significant shares of baby boomers are currently facing financial difficulties: 30% reported that have stopped contributing to retirement accounts, 30% said they have found it more difficult to pay their mortgage or rent, and 16% said they have taken premature withdrawals from their retirement accounts.
The survey also showed, however, that the boomers who have consulted financial professionals are more confident on average: although only 27% said they work with a financial professional, 80% of this group indicated that feel better prepared for retirement as a result, and 78% of this group reported that have at least $100,000 saved for retirement.