According to the survey by Allstate Financial, the nation’s 76 million Baby Boomers have only saved 12% of what they believe they will need to meet their basic living expenses during retirement.
The Retirement Reality Check survey also found that 69% of Baby Boomers are confident that they know how much money they need to save in order to maintain the lifestyle they want in retirement.
However on average, those surveyed said they would need $30,000 per year for basic living expenses during retirement. In order to have this money, Baby Boomers will need approximately $1 million upon retirement, given an 8% return on assets and an inflation rate of 4%.
The average Baby Boomer has only saved $120,000, 12% of the money needed for a 20-year retirement, spending $30,000 a year, taking inflation into account.
The survey also found that despite market volatility, concerns over a recession, and the possibility of war,
· over 80% of Baby Boomers do not plan to
significantly increase their retirement savings, and,
· two-thirds plan to make no change at all to the amount they are currently saving.
· three-quarters have not made significant changes
to their investment style after September 11,
· 10% said they would invest much more conservatively, and
· only 3% much more aggressively,
· while the remainder were unsure
Some 63% believe that retirement will be the best years of their lives, but 68% say that saving for their future will continue to be an obligation, even while they’re retired.
The survey also found that:
· three fifths anticipate that they will have more
financial obligations in retirement than their parents did,
· almost 60% will be in debt during retirement,
Of those expecting to make payments,
· almost 30% expect to pay a mortgage,
· close to 40% expect to make car payments, and
· a quarter will pay off credit card debt during retirement
In addition, many US Baby Boomers expect to be responsible for some kind of financial support for family members during retirement,
· some 15% of those surveyed will provide for
elderly parents and/or in-laws,
· almost 30% will be financially responsible for children or grandchildren over 18 years old, and
· one-fifth of Baby Boomers expect to pay tuition for one or more of their children during retirement
Almost a third of Baby Boomers plan to use Social Security as the bulk of their retirement income, despite warnings by the Federal Consumer Information Center that Social Security only replaces 40% of a person’s salary, and predictions by the public trustees of Medicare and Social Security that the Social Security Trust Funds will be depleted by 2037.
The survey was created in conjunction with Harris Interactive, which polled 1,004 people born between 1946 and 1961, with household incomes ranging from $35,000 to $100,000. For the data related to September 11, 294 respondents, who met the same criteria, were surveyed.