A news release from t he U.S. division of Sun Life Financial said its survey found that more than 70% of baby boomers expect their income needs to fluctuate greatly throughout retirement with the highest income amount needed in the first five years.
According to those surveyed, more than 80% cited domestic and international travel, hobbies, and a new career as the top activities they plan to pursue during the first five years of retirement.
“This survey shatters the old rule that people should plan to live on a fixed 70%-80% of their pre-retirement income,” said Mary Fay, Senior Vice President and General Manager of Sun Life Financial’s Annuities Division, in the news release. “Boomers are eager to live life to the fullest, particularly in the early years of their retirement. To make that possible, they will need to create much more flexible retirement income plans that give them access to the money they need, when they need it.”
According to the news release, to fund this “retirement spending boom,” the survey indicates boomers plan to draw from a number of possible retirement income sources including:
- Social Security;
- Pensions; or
- employer-sponsored retirement plans such as 401(k) plans.
Half of those surveyed indicated they would rely on rental and investment property income as well as the assets from the sale of a business. Eighty-six percent indicated they plan to earn income from a job.
Boomers have high expectations for their early retirement years. In the first five years of retirement, boomers indicated they plan to pursue the following lists of activities.
- 85% Domestic travel
- 83% Hobbies
- 82% International travel
- 81% Begin a new career
- 78% Spend more time with children/grandchildren
- 76% Start a business
- 73% Volunteering
- 72% Take classes or get a degree
- 61% Purchase a second home
- 56% Relocate to a new location
- 54% Assist charitable organizations
The survey was sponsored by the U.S. division of Sun Life Financial and conducted and analyzed by independent research firm Cogent Research, Cambridge, Massachusetts. It was conducted with 1,000 non-retirees and 1,000 retirees aged 50 and over in January 2007. Each participant had over $250,000 in investable assets and was working with a financial professional in making investment decisions.
The full research brief ishere .