May 23, 2013

Oldest Boomers Not Working Till They Drop

Boomers retiring when they want, but some suffer diminished standard of living

More than half of the oldest boomers are now fully retired, mostly because they are ready to stop working, a MetLife Mature Market Institute study found. Just 17% of retired boomers born in 1946 were forced to stop working for health reasons and 10% stopped working due to a job loss.

A fifth of retired boomers suffered a drop in their standard of living after retirement. For most, unexpected and high costs were the main reason, but 35% said they didn’t have enough retirement income. Only 12% said they had enough but ran out.

GfK Custom Research North America surveyed more than 1,000 respondents at the end of 2012 on behalf of MetLife. All respondents were born in 1946; they turned 66, their full retirement age, in 2012.

MetLife found only 8% of boomers retired later than they thought they would, and of those, 26% kept working simply because they liked it. Some boomers are partially retired, with 14% working part time. Those partially retired boomers said they planned to retire at 71, up from 69 in 2011. Twenty-one percent are still working full time.

“They are poised to remain active and engaged. As their nests empty, they seem to be largely feeling healthy and positive,” Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute, said in a statement. “On the negative side, a good half of this group may not have achieved their retirement savings goals and are not confident about paying for the next phase of their lives."

That could be encouraging them to seek professional advice, though. The report found over half of the oldest boomers have turned to an advisor, up from 36% in 2008. “While these oldest boomers may be realizing they need professional help in their retirement planning efforts, 13% still say they don’t have retirement savings goals, and 34% are somewhat or significantly behind in their retirement savings goals,” according to the report.

About 40% of respondents who are still working think their income in retirement will be about the same as their preretirement income. However, a third expect their standard of living to fall in retirement.

MetLife found 86% of respondents were collecting benefits, and 43% started taking benefits earlier than they thought they would.

Long-term care was a primary retirement concern for 31% of respondents, although less than a quarter own LTC insurance. An overwhelming majority want to age in place.

Overall, though, boomers are fairly optimistic about the future. Just 23% say they are pessimistic, and 42% say they’re optimistic. The report noted that those who are still working were more likely to say they’re pessimistic.

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