Almost Half of Baby Boomers Nearing Retirement Have
Doubts About Affording It
Two-Thirds of Boomers Call Social Security an
"Extremely" or "Very" Important Source of Retirement Income
April 6, 2011 Nearly half of
todays baby boomers now pouring into the senior citizen ranks do
not feel confident they will have the financial resources to live
comfortably during their retirement, according to a new poll from The
Associated Press and LifeGoesStrong.com.
With boomers starting to
retire, their financial worries are increasing. While 44 percent are not
confident that they can retire comfortably, more than half (57%) report
that they lost money in a retirement plan, personal investments or real
estate during the recent economic downturn.
Many are delaying retirement
as a result: among those who lost money in the downturn, 42 percent say
that loss has delayed their retirement.
'Distributional Effects of
Accelerating and Extending Increase in the Full Retirement Age,'
a policy brief, finds pluses and minuses in raising the retirement age
by Glenn R. Springstead,Social
Security Office of Retirement Policy
"Economic anxiety has
certainly taken its toll on baby boomers. Pensions, social security and
individual savings plans like 401(k) accounts aren't secure enough to
float the average boomer's retirement boat," said personal finance
expert Valerie Coleman Morris, a guest blogger on LifeGoesStrong.com and
author of "Mind Over Money Matters: It's Your Money So Take it
Personally."
Overall, 55 percent express at
least some confidence that they will have the financial resources to
live comfortably during their retirement, but only 11 percent have deep
confidence that they are financially prepared.
Married boomers (61%) feel
more confident that they are prepared than unmarried boomers (46%).
Among those with household
incomes below $50,000, just 35 percent express confidence that they are
financially prepared for retirement, compared with 66 percent among
those in higher-income households.
Those who rate their own
financial management skills poorly are downright terrified: just 14
percent express confidence that they have the money for retirement.
Nearly half (47%) of self-confessed poor financial planners have no
confidence at all.
Boomers' median retirement
savings stands at $40,000, brought down somewhat by the sizable 24
percent who report having saved nothing for their retirement. Among all
those who have saved at least something for retirement, the median
stands at $100,000.
Just as startling is the
boomer's dependence on Social Security, a financial "safety net" that is
expected to run dry in 2037, according to the Congressional Budget
Office. Asked to rate the relative importance of different sources of
income in retirement, 65 percent of boomers called social security
"extremely" or "very" important.
Here's how boomers rate those
sources of income:
● Social Security (65%
extremely/very important)
● A workplace retirement
savings plan (42%)
● An employer-paid pension
plan (41%)
● A personal savings
account other than an IRA (35%)
● Personal investments
other than a retirement account (31%)
● An IRA (31%)
● Money from the sale of
your home (17%)
● Money from other family
members (9%)
There are also stark
differences by socio-economic status in whether boomers have even begun
to save:
A narrow majority of those in
households with incomes below $50,000 (51%) have saved nothing for their
retirement, that falls to 17 percent among those with incomes between
$50,000 and $100,000 and 7 percent among those in households with
six-figure annual incomes.
Among boomers without a
college degree, 37 percent have saved nothing, compared with 10 percent
of boomers who have college degrees.
42 percent of all non-whites
have saved nothing, compared with 24 percent of whites.
"Boomers are facing one of the
most daunting retirement income challenges in history," observes Morris.
"The 'new normal' needs to be:
if I don't change my behavior, I won't be able to change anything. Start
by saving a little bit of money from multiple places modify cell phone
plans, reduce cable channels, look for cheaper insurance, shop with
coupons rather than thinking of savings as what you put away after you
take care of everything else."
Even for those who believe
they will be able to retire, this rite of passage does not necessarily
equal a life of leisure. Two-thirds (67%) plan to do some sort of work
for pay once they have retired from their career, with a plurality
saying they will do so in order to make ends meet (35%).
Twenty-nine percent plan to
work in order to stay busy, 26 percent to have money for extras and 2
percent are aiming for a second career.
Methodology:
The AP-LifeGoesStrong.com
Poll of the boomer generation on work and retirement was conducted March
4-13, 2011 by Knowledge Networks of Menlo Park, Calif. It involved
online interviews with 1,160 adults born between 1946 and 1964, as well
as companion interviews with an additional 330 adults of other age
groups. The survey has a margin of sampling error of plus or minus 4.3
percentage points for all adults, 3.5 percentage points for baby
boomers.
How the poll
sponsors define their companies:
LifeGoesStrong.com
(www.lifegoesstrong.com)
was launched in May 2010 by Digital Works@NBCU, a division of iVillage
Networks, as a vibrant online destination for adults between 46 and 65
years of age who are living well and going strong. A network of websites
celebrating the topics and passions at the center of the boomer
generation's everyday lives, Life Goes Strong currently attracts over
1.5 million uniques a month, featuring verticals devoted to family,
style, technology, health, home, work and play.
The Associated
Press (www.ap.org)
is the essential global news network, delivering fast, unbiased news
from every corner of the world, to all media platforms and formats.
Founded in 1846, AP today is the largest and most trusted source of
independent news and information. On any given day, more than half the
world's population sees news from AP.
Keep up with the latest news for senior citizens, baby
boomers
April 6, 2011 Nearly half of
todays baby boomers now pouring into the senior citizen ranks do
not feel confident they will have the financial resources to live
comfortably during their retirement, according to a new poll from The
Associated Press and LifeGoesStrong.com.
'Distributional Effects of
Accelerating and Extending Increase in the Full Retirement Age,'
a policy brief, finds pluses and minuses in raising the retirement age