Overall economic satisfaction among Baby Boomers dropped precipitously in 2015, to 48% from 65% in 2014 and from 76% in 2011, and the percentage of Boomers feeling extremely or very confident they will have enough money to last throughout retirement has declined significantly, to 27% of Boomers in 2015 from almost four in 10 in 2011.
However, 44% believe their financial situation in five years will be somewhat or greatly improved. “Baby Boomers are more optimistic about the future, in part due to market gains in the past couple of years, but also partly because more Boomers remain in the work force still, shoring up savings,” said Cathy Weatherford, president and CEO of IRI, discussing a report, “Boomer Expectations for Retirement 2015,” from IRI during a kickoff call for National Retirement Planning Week.
Only six in 10 Boomers report having money saved for retirement, down sharply from prior years when approximately eight in 10 had retirement savings. Only 28% of Boomers are extremely or very confident they will have enough money to pay their medical expenses in retirement, down from 37% in 2011, and only one in five are extremely or very confident they will have enough money to pay for long-term care in retirement, down from about one-quarter in prior study years.
More than one-third of working Boomers (36%) plan to retire at age 70 or later, significantly higher than the one in five (19%) that planned to retire at or after age 70 in 2011. One in five Boomers (18%) are uncertain when they might retire, and three-quarters of them cite not having saved enough or being unsure they will have enough to retire on as the reason for their uncertainty, compared with almost four in 10 (39%) that were unsure of their retirement age in 2011.
IRI’s survey found Baby Boomers who work with advisers are better prepared for retirement. More than 90% of Boomers who work with advisers have money saved for retirement, and more than eight in 10 feel they are better prepared for retirement because they work with a financial professional.
“I think it’s important to consider that Boomers who work with advisers are better prepared,” said Weatherford. “Professional financial help can add tremendous value around preparedness, confidence and anticipation of cognitive problems.”
According to the survey, annuity ownership is highly correlated with retirement planning, retirement readiness and positive retirement expectations. More than nine in 10 Boomers who own annuities have money saved for retirement; less than half of Boomers who do not own annuities have retirement savings.
Eight in 10 Boomers who own annuities expect their money to last throughout retirement, and to have at least some disposable income for travel and leisure, compared with less than half of those who do not own annuities. More than six in 10 have calculated the amount they think they will need to have saved to retire, versus less than one-third of non-annuity-owners.
More than six in 10 annuity-owner Baby Boomers have consulted a financial adviser to help them prepare for retirement; fewer than two in 10 non-annuity-owners have taken this step.
According to Weatherford, the goals of National Retirement Planning Week goal are to make Americans aware of the need to plan for retirement, to encourage those who have planned to review and update their plans, to urge Americans to take a long term view of saving and investing, and to distribute information to help them make good, informed decisions.
Weatherford added that during National Retirement Planning Week, Tuesday is designated as Social Security Day and Thursday as Health Care in Retirement Day. Materials for consumers and financial professionals can be found on www.retireonyourterms.com.