Boomers’ Retirement Concerns Rose Sharply In Last Year
Baby boomers retirement worries have almost doubled in the past year as the value of their retirement savings plummeted more than 22%, Allstate Corporation, Northbrook, Ill., reports.
Average retirement savings declined from nearly $120,000 in 2001 to $93,000 in 2002 among those participating in Allstates second annual retirement survey.
The survey found that 52% of baby boomers are concerned about saving enough money for retirement, up from 29% in 2001.
Healthcare expenses are an increasing concern, too. The survey found that 67% are worried about these costs, up from 39% in last years survey.
Female boomers are more worried about not having enough money (55% of women vs. 48% of males), Social Security disappearing (54% vs. 40%) and getting sick (52% vs. 45%), says the survey, conducted by Harris Interactive, Rochester, N.Y.
Allstate cites financial experts who agree that individuals will need about 75% of their current income if they want to live in a way similar to how they live now. The company points out, however, that Social Security and pensions alone will likely fall short of that level of income.
Although 74% of those surveyed say they are financially prepared for retirement, 59% expect to carry some form of debt into retirement in the form of a mortgage (27%), car payments (36%) or credit card balances (28%).
Of the surveyed boomers who have not yet saved for retirement, 64% say they cannot yet afford to, with 53% of these planning to start saving at a later date.
While 66% of respondents thought they know how to make the right financial decisions on their own, 62% acknowledge that choosing the right kind of investment is a challenge for them. And of the 56% of respondents who did not have a financial advisor or broker, 33% believe they would benefit from professional advice.
The survey also found some ethnic differences. Of the 58% of surveyed African-American baby boomers who do not currently work with a professional financial advisor, 49% think they might benefit from having such an advisor. And while 34% of baby boomers overall believe financial institutions aren’t interested in them, this assumption is most often seen among Hispanics, of whom 44% thought it was true.
Surveyed baby boomers look forward to a retirement full of leisure activities, including reading, exercise and vacationing, Allstate reports.
Respondents estimate they would spend close to $13,700 a year on such recreational activities during their retirement.
Hispanic boomers estimate they would spend $10,000 a year on leisure activities, while African Americans peg the figure at $11,700.
The nations 76 million baby boomers (those aged 38 to 56) make up 29% of the U.S. population, Allstate notes. It cites a U.S. Bureau of Labor Statistics projection that by the year 2030, there will be 70 million people aged 65 and older, more than twice as many as in 1999.
Reproduced from National Underwriter Life & Health/Financial Services Edition, August 26, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.