Baby Boomers’ Retirement Planning Confidence Trending Downward
April 9, 2013 by N/A
WASHINGTON, D.C.– The Insured Retirement Institute (IRI) released its third annual report on Boomers’ retirement expectations that reveals a continuing decline in Boomers’ retirement planning confidence. The percentage of Boomers who are confident in their financial preparations for retirement has dropped each year since the report’s inception—from 44 percent in 2011 to 37 percent in 2013. Moreover, the majority of Boomers, 61 percent, do not see their financial situation improving in the next five years.
“Boomers continue to face financial struggles in an era when they have the bulk of responsibility for planning and saving for retirement,” said Cathy Weatherford, IRI President and CEO. “This has resulted in a generation that lacks confidence in their financial futures as they approach their retirement years. The silver lining to this report is that Boomers who work with a financial professional are much more confident in their retirement plans. They also are more likely to have determined a retirement savings goal, more likely to have retirement savings, and more engaged with their retirement plans. Developing a holistic retirement strategy, saving, and remaining engaged with your plan—these are the fundamental steps toward attaining financial security during one’s retirement years.”
Key findings from the report:
· 48 percent of Boomers who work with a financial professional are very or extremely confident with their financial preparations for retirement, compared to only 28 percent working on their own.
· 71 percent of Boomers working with an advisor have determined a retirement savings goal and 94 percent have retirement savings. This compares to only 34 percent and 64 percent, respectively, of Boomers who have not consulted an advisor.
· Boomers working with an advisor are more engaged with their retirement plans, as measured by rebalancing of retirement savings accounts. Nearly two-thirds rebalance their portfolios yearly or every few years, while conversely, 61 percent of Boomers who have not consulted an advisor rarely or never rebalance their portfolios.
· 79 percent of working Boomers expect employment during retirement to be a source of retirement income, an increase of 12 percentage points from the 2011 study.
· A noticeable decline in the number of Boomers who are unsure of their anticipated retirement age has appeared—from 35 percent in 2011 to 26 percent in 2013.
· More Boomers will delay retirement until age 70 or later. In 2011, 11 percent of Boomers planned to retire at 70 or later, but by 2013, that percentage increased to 18 percent.
· Overall 21 percent of Boomers reported postponing their retirement.
· While 46 percent of retired Boomers are confident in their retirement preparations and their ability to live comfortably throughout their retirement years, only 32 percent of working Boomers have that same level of confidence.
· Beyond saving for retirement, the majority of Boomers are not confident in meeting other competing financial demands: 69 percent of Boomers lack confidence in paying for their children’s college education and 75 percent lack confidence in covering long-term care expenses for their parents.
The study of Americans aged 50 to 66 was released during a conference call with reporters to commence National Retirement Planning Week® 2013. The annual campaign strives to promote and increase awareness for comprehensive retirement planning.
