Benefits May 31, 2001

Retirement Will Have to Wait for Many

May 31, 2001 (PLANSPONSOR.com) - Although 80% of affluent baby boomers polled in a recent survey expect to be financially secure in retirement, many of them will not retire as early as they would like.
Reported by

Half of the 500 respondents, in ING Aetna Financial Services’ “Boomers on the Brink’ survey, which polled those with incomes of between $50,000 and $125,000, said they’d like to retire by age 55 and 80% expect to be as well off.

But only 20% believe they’ll have enough money to do so. Also:

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  • 75% hope to retire by age 60, but only half expect to be in the position to do so
  • only 8% said they’d need to work beyond the age of 65 to support themselves.

Bad Planning

Compounding the problem:

  • one in five said they had cashed out the money in their former employer’s retirement plan
  • 37% said they would likely cash out of their retirement plan on changing jobs
  • almost 50% spend one hour or less on retirement planning activities in a typical month
  • the same proportion find retirement planning overwhelming or confusing, or  don’t think about it at all.

Many households have omitted insurance from their retirement planning. Only 60% have disability insurance and only one in five have long-term care insurance.

Grade yourself

Asked to cite reasons for their poor retirement preparation, the 39% who gave themselves a C when asked to grade their planning efforts, cited, in order:

  • failure to start planning for retirement early
  • living beyond their means
  • job instability
  • bad investments.

The remaining respondents gave themselves As or B’s for:

  • getting an early start
  • making wise investments
  • self discipline
  • living modestly
  • diligently saving money.

Bright Side

The survey did have a silver lining:

  • almost two-thirds said they feel more financially prepared for retirement than their parents
  • only 12% said they feel less prepared
  • 90% surveyed said they have life insurance.

In addition the survey found that:

  • half of respondents aren’t expecting an inheritance
  • only 8% said they have received their inheritance so far, and
    another 32% expect to receive one
  • 5% have received some money and expect more.

On the whole, respondents were optimistic about the future, with 61% predicting that the stock market will begin to recover within a year, and only 3% expecting a rebound in three years.


 

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