Boomers "Paralyzed" About Saving: Guardian

Boomers in general clearly need more education about sound financial planning if they are going to retire contentedly, he adds

Among the survey’s findings:

• 80% of boomers are concerned about having adequate income during retirement, but half said they aren’t sure how much money they will need.
• 24% said they were on track to have enough retirement savings.
• 55% said they could comfortably live on 80% of their current income, yet in answer to another question, only 27% said they could save more than 20 percent of their income today. 17% said they could save nothing.
• In actuality, only 16% saved more than 20% of their income in 2003, while 23% said they saved nothing.
• 76% of all boomers thought that saving $100 a month from age 30 to 65 would yield greater returns than saving $100 a month from age 21 to 30. In fact, the investor who saves from age 21 to 30 would have the larger nest egg when they turn 65. So the vast majority clearly don’t understand compound interest, the Guardian says
• 13% said they would be satisfied with an investment that grew from $10,000 to $15,000 over the course of 20 years.

An individual’s wealth, not age, is a better indicator of understanding about the principles of money and the financial needs of retirement.

“No matter their age, the boomers with more than $100,000 in investable assets had a better understanding, though not always great, of principles like portfolio diversification and the difference between risk and volatility,” Murtha says.