Almost Half of Baby Boomers Nearing Retirement Have Doubts About Affording It

Two-thirds of boomers Call Social Security an “Extremely” or “Very” Important source of Retirement Income.

Nearly half of today’s baby boomers – now pouring into the senior citizen ranks – do not feel confident they will have the financial resources to live comfortably during their retirement according to a new poll from The Associated press and LifeGoesStrong.com. With boomers starting to retire, their financial worries are increasing. While 44 percent are not confident that they can retire comfortably, more than half (57%) report that they lost money in a retirement plan, personal investments, or real estate during the recent economic downturn. 42 percent say that loss has delayed their retirement.“Economic anxiety has certainly taken its’ toll on baby boomers. Pensions, social security and individual savings plans like 401(k) accounts aren’t secure enough to float the average boomer’s retirement boat.” Said personal finance expert Valerie Coleman Morris, a guest blogger on LifeGoesStrong.com and author of “Mind Over Money Matters: It’s Your Money So Take it Personally.”Overall, 55 percent express at least some confidence that they will have the financial resources to live comfortably during their retirement.But only 11 percent have deep confidence that they are financially prepared. Married boomers (61% feel more

 confident that they are prepared than unmarried boomers (46%). Among those with household income below $50,000, just 35% express confidence that they are financially prepared for retirement
compared with 66% among those in higher income households. Those who rate their own financial just 14 percent express confidence that they have anagement skills poorly are downright terrified:
the money for retirement. Nearly half (47% of self-confessed poor financial planners have no confidence at all.Boomers’ median retirement savings stands at $40,000, brought down somewhat by the sizable 4% who report having saved nothing for the retirement. Among all those who have saved at least something for retirement, the median stands at $100,000. Just as startling is the boomer’s dependence on Social Security, a financial “safety net” that is expected to run dry in 2037, according to the Congressional Budget Office. Asked to rate the relative importance of different sources of income in retirement, 65% of boomers called social security “extremely” or “very” important.Here’s how boomers rate those sources of income:
  • Social Security (65% extremely/ very important)
  • A workplace retirement savings plan (42%)
  • An employer-paid pension plan (41%)
  • A personal savings account other than an IRA (35%)
  • Personal investments other than a retirement account (31%)
  • Money from the sale of your home 91%)

  • Money from family members (9%)

There are also stark differences by socio-

economic status in whether boomers have even begun to save:A narrow majority of those in households with incomes below $50,000 (51%) have saved nothing for their retirement. That falls to 17% among those with incomes between $50,000 and $100,000 and 7% among those in households with 6 figure annual incomes. Among boomers without a college degree, 37% have saved nothing, compared with 10% of boomers who have college degrees. 42 % of all non-whites have saved nothing, compared with 24% of whites. “boomers are facing one of the most daunting retirement income challenges in history,” observes Morris.“The ‘new normal’ needs to be: if I don’t change my behavior, I won’t be able to change anything. Start by saving a little bit of money from multiple places – modify cell phone plans, reduce cable channels, look for cheaper insurance, shop with coupons – rather than thinking of savings as what you put away after you take care of everything else.”Even for those who believe they will be able to retire, this rite of passage does not necessarily equal a life of leisure. Two-thirds (67%) plan to do some sort of work for pay once they have retired from their career, with a plurality saying they will do so in order to make ends meet (35%). 29% plan to work in order to stay busy, 26% to have money for extras and 2% re aiming for a second career.

 

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