Allianz Life Insurance Company of North America also found
that one-quarter of this group appears to be uninformed about the effects of inflation and
more than 40% may not have a realistic idea of when retirement planning should
"It's alarming that so many Boomers on the cusp of
retirement are still unclear about the basic factors which determine their
ability to fund their lifestyle once they stop working," said Allianz Life
President and CEO Walter White. "When you consider rising health care costs
and the devastating effects of inflation on purchasing power, the fact that so
many Transition Boomers are still confused about retirement income planning is
a significant issue which urgently demands more education."
Of the one-third of Transition Boomers who indicated
uncertainty about their retirement income needs, more than half (64%) were ages 55 to 60 and about one-third (36%) were between 61 and 65. When asked about their
biggest concerns in retirement, 28% of Transition Boomers responded "not being
able to cover basic living expenses."
Boomers also significantly underestimate the effect inflation and taxes will have in retirement. While health care costs ranked as
the a top retirement concern at 32%, only 10% chose keeping up with
inflation and just 6% identified taxes in retirement.
The majority of Transition Boomers (94%) said they expect
Social Security to play the biggest role in their retirement income, followed by pension
plans (46%), defined contribution (DC) plans such as 401(k)/403/457 plans (43%) and
"other investments" (30%)—all sources that make up a well-rounded
retirement income portfolio. However, 30% indicated they expect some retirement
income from part-time work and 20% anticipate income from either an inheritance
(9%) or "other sources" (11%).
Unfortunately, many Transition Boomers are starting the
retirement income planning process late. Forty-three percent said they
will not focus on retirement income strategies until they are less than five
years from the start of retirement, with 16% waiting until six
months to one year prior.