That was a key finding of a new nationwide survey of pre-retirees by Thrivent Financial for Lutherans about what Baby Boomers would do if they could turn back the clock and restart their retirement planning process, according to a news release.
Thrivent said that 71% of respondents said they wished they had started saving for retirement when they had their first full-time job and 86% said they would advise younger generations to start saving the moment they can. Not only that, according to the poll, but 61% said they would invest a $1 million unexpected income into retirement savings rather than use it to start a business, buy a luxury home or go on a shopping spree.
“This survey confirms what we’ve been hearing for the past couple of years, that we baby boomers are very optimistic about retirement,” said Pam Moret, Thrivent Financial executive vice president of marketing and products, in the news release. “Unlike the frugal mentality of my parents’ generation, our carefree approach to life may have kept us from saving for retirement. However, that carefree attitude about retirement planning could carry a price – a price we might pay in our golden years.”
Although the majority of pre-retirees (67%) anticipate that they will either enjoy a lifestyle similar to life now – or even thrive in retirement – they admit to wishing they were better prepared.
According to the survey, most pre-retirees (35%) ranked “starting to save and invest too late in life” as the number one obstacle that keeps them from saving more money for retirement. Other top-ranking obstacles included:
- the cost of health care or health insurance (32%),
- a low-paying job (29%), and
- credit card debt (28%).
Despite well over half (56%) of pre-retirees expecting to enjoy a standard of living similar to or better than their own parents, 71% of respondents feel a lack of money in retirement may prevent their expectations from happening.
While many factors contribute to pre-retirees’ guarded optimism about retirement, a lack of proactive planning and saving is the greatest cause for concern. The survey also found:
- One in four (24%) pre-retirees have not begun saving for retirement and one in five (19%) did not start until they were at least 45 years old.
- Fifty-nine percent have neither gone through a formal retirement planning process with a financial professional nor done serious calculations on their own.
- Forty-one percent of respondents are worried about the effect of health care costs on their retirement savings.
The survey covered 2,500 adults, ages 45-64.