In the United States there are roughly 76 million Baby Boomers, Americans born approximately between the years 1946 and 1964. Less than a quarter (24 percent) of these older adults are confident that they will have enough savings to last throughout their retirement years, according to a new study from the Insured Retirement Institute (IRI). Twenty-two percent of surveyed Boomers believe that they are currently doing a good job of preparing (financially) for retirement but only 27 percent are confident that they will have enough money to cover their healthcare expenses in old age, and just 16 percent feel that they will be able to pay for their potential long-term care needs. All of these statistics reflect a lower overall level of retirement confidence compared to 2012 when the same survey was conducted. Still, most surveyed Boomers (59 percent) expect to retire "on time" at age 65 or older, although 26 percent of these respondents now plan to wait at least until the age of 70 to stop working.
Around two-thirds of surveyed Boomers who said that they lack confidence in their current level of retirement readiness believe that they would be better off if they had started earlier with their savings and amassed a larger nest egg. This apparent lack of preparedness is not too surprising since only 39 percent of Boomer respondents said that they at some point attempted to estimate how much money they will need to have saved in order to be financially secure during retirement. Among the Boomers who did try to forecast their old-age outlays, a third did not include healthcare costs in their calculations. That is a mistake because healthcare expenses on average were estimated to chip away 23 percent of Boomers’ income in retirement. Most alarming is that only a small majority of surveyed Boomers said that they actually have money saved for retirement, and 59 percent expect Social Security to be a major source of their income in old age. However, 90 percent of Boomers who reported working with a professional financial advisor said that they have money set aside for retirement, and more than eight in ten respondents who consulted with an advisor believe that they are better prepared for retirement as a result.
Sources: Insured Retirement Institute, ThinkAdvisorPost author: Charles Couch