Inadequate savings is one reason for the lack of confidence, as nearly half of the Boomers with savings report that they have saved less than $100,000. This translates to less than $7,000 a year in retirement income. Overall, one in five Boomers is concerned that they won’t have enough savings to cover basic living expenses. The study found that Boomers lacking confidence in their retirement security have some common regrets, with 68% wishing they had saved more and 67% wishing they started saving earlier.
IRI found that only 22% of Boomers are confident about their preparations for retirement, 27% are confident their savings will be sufficient to cover health care costs in retirement, and only 16% are confident they can cover the cost of long-term care.
A lack of savings is resulting in delayed retirement for many workers. During the past year, 30% of Boomers postponed their plans to retire, and 59% now plan to retire at age 65 or later. Twenty-six percent now say they plan to retire at age 70 or later, compared with 17% in 2011.
When asked how they will pay for living expenses if financial resources are depleted, 71% of Boomers say they will try to rely solely on Social Security, and 54% say they will try to return to work. Nearly six in 10 Boomers expect Social Security to be a major source of income in retirement, up from 43% in 2014.
NEXT: Holistic planning needed
The study underscored the importance of establishing a holistic retirement savings plan that includes working with a financial professional. More than eight in 10 Boomers who work with a financial professional say they are better prepared for retirement as a result.
Sixty-eight percent of Boomers who own annuities and 78% of those who work with financial professionals have at least $100,000 saved for retirement, compared with only 58% of all Boomers.
More than six in 10 Boomers say they would prefer to meet with a
financial professional in person, and an equal amount say they are
unlikely to use an automated, online solution.
“The road to a confident financial future begins with developing a holistic retirement plan,” says Cathy Weatherford, president and CEO of IRI. “Unfortunately, most Boomers are not taking important planning steps. Less than 40% have determined a savings goal, and just over a quarter are seeking help from a financial professional. Time is running out. Unless Boomers begin to focus on their long-term needs now and commit to saving, they will need to work longer and make steep cutbacks to make ends meet in retirement.”
The full report is available here.